Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Death of a Member

Mr. Speaker: I regret to have to inform the House of the death of Robert Sands, Esq., Member for Fermanagh and South Tyrone.

PRIVATE BUSINESS

BRITISH RAILWAYS (VICTORIA) BILL [Lords]

Read a Second time and committed.

Oral Answers to Questions — SOCIAL SERVICES

Seat Belts

Mr. van Straubenzee: asked the Secretary of State for Social Services what advice he has received as to the compulsory wearing of seat belts from the Medical Commission on Accident Prevention.

The Under-Secretary of State for Health and Social Security (Sir George Young): None recently, but the president of the Medical Commission on Accident Prevention wrote to my right hon. Friend on 6 July 1979 expressing dismay at the loss of the Road Traffic (Seat Belts) Bill with the dissolution of Parliament earlier in that year.

Mr. van Straubenzee: In considering this or any other advice that he may receive from the commission, will my hon. Friend agree that this is pre-eminently an area in which progress should be made by precept and example and not by legislation?

Sir George Young: On 99 issues out of 100, I agree with my hon. Friend's perception of what the Tory Party stands for, but this is the hundreth issue, and I have to agree that compulsion is fitting. It is worth noting that in the Division on the Bill introduced by the hon. Member for Glasgow, Kelvingrove (Mr. Carmichael) in July 1979, of those Conservatives who voted, a majority voted for the Bill.

Mr. Arthur Lewis: One of the claims of the supporters of the compulsory use of seat belts is the alleged cost of the accidents and the hospital treatment. Will the Minister refer to the written question which the Secretary of State answered last week, showing that 20 times as much money is expended on accidents and illness arising from smoking, drinking and various other causes? Perhaps the pessimists will bear that in mind.

Sir George Young: No simple solution is available in the case of the illnesses associated with the activities mentioned by the hon. Gentleman, whereas seat belts have been tried and tested and found to be successful in other countries.

Mr. Moate: Does the Minister agree that no other single practical measure that can be taken would have such an effect on the reduction of loss of life and serious injury on the road? Does he also agree that there is something illogical about the attitude of those people who proclaim the merits of seat belts yet will not support the single practical measure that can be taken to ensure a high rate of wear of seat belts?

Sir George Young: I have made clear my own position. It is worth adding that my hon. Friend the Minister for Health and my right hon. Friend the Secretary of State would also, in a free vote, vote for a Bill providing for the compulsory use of seat belts.

Mr. Ennals: May I say how warmly I welcome the statement made by the Minister, and the further statement on behalf of his colleagues? Is the Minister aware that not only the Medical Commission on Accident Prevention but the Royal College of Surgeons, the Royal College of General Practitioners, the Royal Society for the Prevention of Accidents, the Automobile Association and many other organisations deeply regret the position taken by the Secretary of State for Transport? Will the Secretary of State for Social Services use his good offices to ensure a more flexible attitude when the issue is debated in the House of Lords on a motion by Lord Nugent?

Sir George Young: I welcome the right hon. Gentleman's support for the existence of a second Chamber.

Mr. Rhodes James: Is my hon. Friend aware that precept, example and the expenditure of a considerable amount of public money on exhortation have not solved the problem, and that all the evidence that is given to hon. Members, to the medical profession, to the ambulance services and to the police, leads inexorably in the direction that compulsion is absolutely essential?

Sir George Young: I endorse what my hon. Friend has just said.

National Health Service (Treatment)

Mr. Knox: asked the Secretary of State for Social Services whether he will seek to place the onus on National Health Service practitioners to advise patients whether or not they are receiving treatment under the National Health Service, rather than the onus being on the patient to find out what sort of treatment he is receiving, as at present.

The Minister for Health (Dr. Gerard Vaughan): The ethical onus is already on the practitioner. It is a fundamental part of good professional conduct that when a patient seeks treatment he knows the basis on which it is being given.

Mr. Knox: Should not something more than an ethical onus be placed on the practitioner? Is not my hon. Friend aware that the present situation is very unfair to many patients, particularly those seeking emergency treatment?

Dr. Vaughan: I am aware that recently one of my hon. Friend's constituents had a special problem in an emergency. The present system has been working reasonably well for a long time. However, I undertake to look into the matter again with the General Dental Council and the British Dental Association.

Mr. Robert Atkins: When will the regulations proposed by the DHSS, which concern patients who receive treatment from National Health Service practitioners, but who are not entitled to free treatment—such as those visiting from abroad—come into effect? It should be borne in mind that the tourist season is upon us.

Dr. Vaughan: I expect the regulations to come in in October.

Special Hospitals

Mr. Kilroy-Silk: asked the Secretary of State for Social Services how many patients are awaiting transfer from each of the special hospitals; and when he expects the transfers to take place.

The Secretary of State for Social Services (Mr. Patrick Jenkin): On 1 April 1981, 31 patients in Broadmoor, 129 in Rampton, 43 in Moss Side and four in Park Lane hospital were awaiting transfer. These transfers will take place as soon as the appropriate health authority can make a suitable hospital bed available.

Mr. Kilroy-Silk: Is the right hon. Gentleman aware that he and his predecessors have been saying that for the past seven years? Is it not a continuing disgrace and scandal that many patients have to wait a long time in those hospitals, particularly when many are probably being detained illegally and are certainly being denied proper medical care and treatment? Will the right hon. Gentleman ensure that the NHS lives up to its responsibilities?

Mr. Jenkin: I share the hon. Gentleman's concern, but it is only right to put on the record what has been achieved. In the first quarter of this year 61 patients were transferred, compared with 38 in the same quarter of last year. Since last November—when the Rampton report appeared—90 patients have been transferred. There is a marked increase in the rate at which special hospital patients are being recommended for transfer. The number of patients who have been waiting for more than two years has fallen from 66 in January 1980 to 45 in April 1981. That is a reduction of almost one third. I am satisfied that the health authorities are doing their best. More patients are being recommended for transfer. I intend to keep a close watch to ensure that the intention which the hon. Gentleman and I share—that those who should not be in special hospitals are transferred to National Health Service hospitals—becomes a reality.

Mr. McCrindle: Whether transfers are made to NHS hospitals or back to the community, does the Secretary of State agree—particularly in cases that involve criminal offences—that continuing surveillance should be the order of the day? It would then be possible to reassure those communities that surround NHS hospitals to which patients had been transferred. In addition, such surveillance would be in the interest of the patient.

Mr. Jenkin: I understand my hon. Friend's concern. It is essential that there should be secure accommodation for patients who are regarded as a danger to the community. That is why the Government have maintained and are getting ahead with a policy that will give each region a regional secure unit, to which patients for whom such treatment and care is appropriate can be transferred.

Mrs. Dunwoody: Although there has been an advance in the number of patients transferred, is there not a time lag? Is the Secretary of State satisfied that local authorities will have sufficient money to help in the provision of halfway houses, in the form of hostels? In several counties, suitable hostel accommodation is lacking and existing accommodation is being closed.

Mr. Jenkin: One must be realistic when discussing the transfer of patients from special hospitals. The vast majority of patients will need psychiatric care in NHS hospitals. The subsequent transfer to hostels—if appropriate—is a different question.

Mr. Greenway: Is my right hon. Friend aware that another special hospital, namely, Perivale maternity hospital in my constituency, is in difficulties? It is strongly


rumoured that there is a danger of closure less than a year after confirmation that it had a strong future. Will my right hon. Friend confirm that?

Mr. Speaker: Order. The hon. Gentleman should put that question on the Order Paper.

National Health Service (Training)

Mr. Cryer: asked the Secretary of State for Social Services if he will make a statement on the provision of training facilities in the National Health Service.

Mr. Patrick Jenkin: Responsibility for the professional training of most NHS staff is vested in statutory or other independent outside bodies. Advice on other training is provided by the National Training Council for the NHS and the five national staff committees.

Mr. Cryer: Will not NHS training facilities be used by the private sector? For example, the promoters of the Yorkshire clinic, which is being built near Bingley, will almost certainly draw NHS-trained staff from Airedale general hospital, in my constituency. What will the right hon. Gentleman do about private sector promoters and those consultants who put greed before need, in placing private profit before the duty of service towards NHS patients?

Mr. Jenkin: I must make it clear that I disagree with the hon. Gentleman's view about the private sector. We welcome the growth of the private sector, because it adds to the total of health care resources available to the people of this country. In addition, it relieves pressure on the NHS. However, the private sector could and should make a greater contribution to the training of health care staff, particularly nurses. My hon. Friend the Minister for Health has been having discussions with the joint liaison committee for independent health care on how the private sector's contribution to staff training might be increased.

Mr. Pavitt: In view of the bottleneck caused by the private sector's drainage of specialised nurses, such as trained theatre nurses and those qualified in renal dialysis, will the right hon. Gentleman put special money into crash courses to repair the damage done? Given the unemployment problem, will he discuss with the Secretary of State for Employment the problem of training in the professions supplementary to medicine, particularly chiropody, in which many school leavers could do a useful job?

Mr. Jenkin: I am not sure that I would want to be operated on in a theatre in which staff had been through a crash course. As I said, we want the private sector to make a better contribution. I welcome the fact that the Wellington Foundation has established a lectureship in nursing at the Chelsea college of the University of London. I am glad to say that that will make a considerable contribution towards allaying the anxieties expressed by the hon. Gentleman.

Mr. Dobson: Will the Secretary of State confirm that, to date, the private sector has made no contribution to the training of medical and nursing staff?

Mr. Jenkin: I absolutely deny that. I direct the hon. Gentleman's attention to the excellent relationship that has existed for many years between the Roehampton school of nursing and the Royal Masonic hospital, where nurses

have done much training. In addition, medical training can often be greatly enhanced if a consultant can use some of the less common cases found in some private hospitals for teaching his students.

Antenatal Care

Mrs. Renée Short: asked the Secretary of State for Social Services what further consideration he has given to encouraging more mothers with babies at risk to attend antenatal clinics.

Dr. Vaughan: I share the hon. Lady's concern over this. We have drawn the attention of the health authorities to the Government's paper Cmnd. 8084, and we are having discussions with the appropriate Royal colleges.

Mrs. Short: Although I thank the Minister for that reply, may I remind him that pregnant women in socioeconomic groups four and five are most at risk? Is he aware that an urgent effort needs to be made to attract such women to antenatal care? That cannot be done without additional resources. The Minister has refused them. Will he reconsider his decision?

Dr. Vaughan: I entirely accept what the hon. Lady has said. At present, 11 out of the 14 regions are actively taking steps to improve the service. We are particularly anxious that the antenatal service should be made as human as possible. I am having discussions with the Royal College of Obstetricians, the Maternity Alliance and other bodies about this.

Mr. Greville Janner: Is the hon. Gentleman aware that about the only non-controversial provision in the Employment Act 1980 is that which provides that mothers shall have a reasonable amount of paid time off work for antenatal care? Is the hon. Gentleman further aware that very little is being done, because employees do not know their rights and employers do not grant them? What does he propose to do?

Dr. Vaughan: I am aware of that. I am also aware that one of the Select Committee's recommendations was that unions should be more involved in the various aspects of pregnant women at work and leaving work.

Elderly Persons

Mrs. Knight: asked the Secretary of State for Social Services what steps he is taking to overcome the problem of elderly persons who should be in geriatric units or old persons' homes who are occupying instead acute beds in hospitals.

Sir George Young: I am concerned that all elderly hospital patients should receive the care most appropriate to their needs, and that scarce resources should not be wasted by unnecessarily prolonged stays in any type of bed. The recently published White Paper on elderly people, "Growing Older", stresses that all hospital departments concerned need to develop admission and treatment procedures geared to as early a discharge as home circumstances and community support permit.

Mrs. Knight: As hospital bed occupancy now costs about £100 a day, would it not be cheaper to build more old people's homes? Is my hon. Friend aware that, for every elderly person occupying an acute hospital bed, solely because he has nowhere else to go, someone is


being denied treatment or surgery? It is two years since I asked the same question. Nothing was done then and I hope that my hon. Friend will do better.

Sir George Young: I will do my best to satisfy my hon. Friend. The economics that she has outlined are correct. Care in the community is cheaper than care in hospital and is what many elderly people want. For that reason we have developed joint funding, which enables the transfer of NHS money to social service departments to enable that transfer to take place. Two-fifths of the total expenditure on joint funding has been devoted to services for elderly people.

Mr. Mike Thomas: Is not the Minister's reply either naive or cynical? He knows that the provisions in his White Paper provide no funds to carry out what the Government are imposing on local authorities. Is he aware that cuts are being made in residential provision, and money spent on day centres, transport to day centres, home helps, telephones and aids and adaptations? Is he not aware that in those circumstances it is cynical and misleading for him to suggest that it is likely that more geriatric patients will be moved from acute beds in hospitals to beds in residential or community care?

Sir George Young: The hon. Gentleman is misinformed. Local authorities have maintained spending on personal social services. Current spending in 1979–80 on personal services was 4·4 per cent. higher in real terms than in 1978–79. Present indications are that spending in 1980–81 will be at about the same level.

Mr. Alfred Morris: On comparative costs, what is the average cost now of placing an elderly person in a welfare home or in an acute bed in a hospital ward? Is the Minister aware that the Secretary of State for the Environment's harrying of local authorities that are trying to improve community care will mean that more and more elderly people will find themselves in more expensive hospital care? How can he possibly justify such a crackpot policy?

Sir George Young: I have given the right hon. Gentleman the figures about the growth in spending on personal social services.

Mr. Alfred Morris: On a point of order, Mr. Speaker. I asked the Minister——

Mr. Speaker: Order. The Minister is answering.

Sir George Young: That problem has been raised by many hon. Members. The National Health Service is developing a programme of building nursing homes to overcome the problem that has been identified of transition of responsibility from hospital to social service departments.

Mr. Alfred Morris: Will the Minister tell me what is the average cost of placing an elderly person in a welfare home and the average cost of placing the same person in an acute bed in a hospital ward? That is the question I asked?

Sir George Young: If the right hon Gentleman will table that question, I will give him accurate figures. I said earlier that the economics were as expressed by my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight)—namely, that the costs of treatment in the community are less than the costs of treatment in an acute hospital.

Mr. Ward: Will my hon. Friend take this opportunity to praise those who work in geriatric units on behalf of the community? In spite of what has been said, they do a good job in difficult and distressing circumstances. Is he aware that many of those workers are young people and the good community job they do is not always recognised?

Sir George Young: I endorse what my hon. Friend has said. Going round hospitals, I have noted the active approach being adopted by many geriatricians to the treatment and rehabilitation of elderly hospital patients, as a result of which they can return to the community much earlier than would otherwise be the case.

European Community (Proprietary Medicine)

Mr. Leighton: asked the Secretary of State for Social Services if he will make a statement on the application of the European Economic Community draft directive on proprietary medicinal products and the question of parallel importing to United Kingdom circumstances.

Mr. Patrick Jenkin: I refer the hon. Member to the sixteenth report from the Select Committee on European Legislation. I subscribe to the view that a directive may be necessary, but not in its present form.

Mr. Leighton: In view of the opposition of the British pharmacists, does the Minister envisage any positive gain from the directive to the National Health Service?

Mr. Jenkin: In theory the extension of parallel importing should exercise a downward pressure on prices but in reality, because the pharmaceutical price-regulating scheme which applies to purchases of drugs by the National Health Service applies only where £200,000 a year and above is spent on the drug in question, it is unlikely that parallel imports would come within the purview of that scheme. The question whether we can benefit from cheaper drugs sold through pharmacists will depend on how far one can squeeze something extra out of the pharmacists. All experience suggests that any difference between the home price and the parallel imported price would be absorbed by the manufacturer and the importer.

Mrs. Dunwoody: If the Minister is not convinced that there will be a saving to the NHS from that sort of change, will he not look at generic prescribing to see whether he cannot do something positive about the drugs bill inside the Service?

Mr. Jenkin: I remain quite unconvinced that it would be to the advantage of patients that the doctors' freedom to prescribe should be circumscribed in the way suggested by the hon. Lady.

Nurses' Pay

Mr. William Hamilton: asked the Secretary of State for Social Services if he will make a statement on nurses' pay.

Mr. Patrick Jenkin: Negotiation of nurses' pay is the responsibility of the Nurses and Midwives Whitley Council. I understand that the council has had some preliminary discussions about a 1981 settlement but has not yet begun any detailed negotiations.

Mr. Hamilton: Is the right hon. Gentleman not aware that, as the Government have made it quite clear that they


will impose a limit of 6 per cent. on nurses' pay and the inflation rate is substantially greater than that, the Government are calling for a substantial reduction in the standard of living of those people? Does he adhere to the view expressed by his hon. Friend the Minister for Health in the Official Report on 15 March 1979 when the said that nurses are a special case deserving of the same kind of treatment as firemen, policemen and the rest? Is this yet another instance of the Tory Government clobbering the most deserving section in the community?

Mr. Jenkin: The hon. Gentleman, who is sponsored by a union that represents nurses, should know that the Government's record on nurses' pay is outstanding in that the cost of nurses' pay to the National Health Service in the two years since the election has increased by about 50 per cent. That is not a bad record. My hon. Friend the Minister for Health has followed up what he said before the election by the letter that he wrote to the management and staff sides of the Nurses and Midwives Whitley Council making proposals to get away from what has sometimes been called the four-year ratchet. Although we have had replies from the management side, we have not yet heard from the staff side.

Mr. Rhodes James: Is my right hon. Friend aware that the number of additional nurses in the National Health Service over the past two years amounts to over 8,000—one of whom is the daughter of the hon. Member for Cambridge (Mr. Rhodes James)? Is he aware that there is considerable concern in the profession that the differences of opportunity among nurses, doctors and consultants and the administrative staff represent a real problem—one to which I hope my right hon. Friend will give his attention?

Mr. Jenkin: The overwhelming majority of the additional staff recruited by the National Health Service in the past two years are engaged in the direct clinical care of patients. There are about 9,000 additional nurses. We have embarked upon reforms which will significantly reduce the burden on management and overheads in the Service.

Mr. Ashley: Although I am not sponsored by a union representing nurses, may I ask whether it is true that the Government regard nurses as no less important than soldiers and policemen, and will ensure that they are paid accordingly?

Mr. Jenkin: The Government made specific, direct and explicit commitments in their manifesto about the pay of the Armed Forces and the police. We also made it clear that we wished, as the hon. Member for Fife, Central (Mr. Hamilton) has reminded us, to find a better way of settling nurses' pay which does not have the effect, as happened under successive Governments—the right hon. Gentleman's Government were as guilty as any—of nurses' pay falling behind over four years and an inquiry being necessary so that they could catch up. That is not a satisfactory way of settling the pay of what, I agree, is an important group in our community.

Mr. Freud: Can the Secretary of State give the House a good reason for the recent increases in failures in nursing exams? Will he tell the nurses that that has nothing to do with economies in the NHS?

Mr. Jenkin: Since the question of the standards for passing exams is a matter entirely for the professional

bodies involved, working under the General Nursing Council, the hon. Gentleman's suggestion is unworthy of him. I can give the hon. Gentleman the good news that there has been a significant improvement in the wastage rate of nurses during training. More nurses are staying on, completing their training and coming into service. That is good news.

Mr. William Hamilton: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Under-Secretary of State's replies, I beg to give notice that I shall seek to raise the matter on the Adjournment.

National Health Service (Contracts)

Dr. McDonald: asked the Secretary of State for Social Services what has been the percentage increase of National Health Service patients being treated under contractual arrangements with the private sector since January 1981; and in what specialties.

Sir George Young: The information requested is not yet available. The latest available figures show that, in England in 1979, there were 24,600 in-patient treatments and 176,000 out-patient attendances under contractual arrangements with institutions outside the NHS. The comparable figures for 1978 were 23,300 and 191,600.

Dr. McDonald: Does the hon. Gentleman agree that encouraging health authorities to take the private sector into account in planning for the future is a subtle way of undermining the NHS? Does he also agree that, as there can be no guarantees that the private sector provision would be available to NHS patients in changed economic circumstances, the whole move in the recent DHSS circular is designed to turn the NHS into a second-rate service and to force people into the private sector?

Sir George Young: That is absolute rubbish. The contractual arrangements between the NHS and the private sector have existed ever since the NHS was formed in 1948. If local health authorities wish to use the private sector in the interests of NHS patients they should be free to do so.

Mr. Paul Dean: Contrary to what the hon. Member for Thurrock (Dr. McDonald) has said, do not the figures that my hon. Friend has given show the value of co-operation between the NHS and the private sector? Will he confirm that the growth of the private sector is helping to relieve pressure on the NHS and to retain staff in medicine and in nursing?

Sir George Young: My hon. Friend is right. We see the private sector as an integral part of the health resources available to this country and we are anxious that the NHS should be free to make use of it if it wishes. To do otherwise would be wasteful and would ultimately penalise NHS patients.

Mr. Terry Davis: Will the Under-Secretary confirm that the Government have recently made it possible for the first time for business men to obtain money from the NHS in order to provide or maintain private hospitals and then to make a profit out of contracts with the NHS?

Sir George Young: I should like further details of the transaction that the hon. Gentleman has outlined, so that I can respond to his remarks.

Sir William Clark: Will my hon. Friend tell us how many trade union members enjoy the advantages of BUPA and the like following negotiations by their leaders?

Sir George Young: I should very much like to give those figures, but the trade unions seem rather coy about releasing them.

Mrs. Renée Short: Is it not a fact that general surgery gets the pickings from the private sector in the NHS and that tonsilectomies, appendicectomies and prostate gland operations are the major sources of income? As those services are being given to patients from outside the NHS, does it not mean that those people are jumping the queue and that NHS patients are having to wait longer?

Sir George Young: In the hope that, if the hon. Lady will not listen to what I say, she will listen to what Barbara Castle said——

Mrs. Short: I am asking you.

Sir George Young: The hon. Lady may prefer to accept it from Mrs. Castle who said:
I believe that it would be intolerable in a democratic society to prevent people buying private medical care if they felt that it was an essential part of their personal interest."—[Official Report, Standing Committee D, 18 May 1976; c. 38.]

Male Midwives

Mr. Haynes: asked the Secretary of State for Social Services what is his estimate of the number of male midwives who have completed their training who are unemployed 12 months after they qualified.

Dr. Vaughan: We do not know for certain, but 13 men have qualified as midwives since May 1978. Four were from overseas and have returned overseas, one is working as a midwife, one is working in health education, and we believe that the other seven are working as nurses.

Mr. Haynes: Does the hon. Gentleman agree that, from the Prime Minister down, it is regularly said in the House by Ministers that we should spend money wisely? But the Government are spending money unwisely as far as male midwives are concerned. When will the hon. Gentleman change his policy on discrimation against males? He supports up to the hilt the organisations that are dead against male midwives. When will he be honest about it and support the money that is being spent in this direction?

Dr. Vaughan: It appears that the hon. Gentleman has some special anxiety about this matter and the Sex Discrimination Act 1975. I strongly share his view——

Mr. Haynes: What are you going to do about it?

Dr. Vaughan: We are about to publish a report on the attitudes of the public and the profession and no doubt the hon. Gentleman will make his views known at that time. We shall be discussing with the professions what action to take.

Benefits

Mr. Andrew F. Bennett: asked the Secretary of State for Social Services if he will make a statement about arrangements for the payments of child benefit.

Mr. Hal Miller: asked the Secretary of State for Social Services whether he has now reached a decision on the periods applicable to the payment of benefits.

Mr. Patrick Jenkin: I am still considering comments received on the proposals in Cmnd. 8106, but I hope to announce the Government's decisions very shortly.

Mr. Bennett: Cannot the right hon. Gentleman make a statement now guaranteeing that all those who want to draw child benefit weekly will be able to do so? If he cannot, will he give advice to those on supplementary benefit about how they could bridge the four-week gap that will exist if the benefit is to be paid four weekly in arrears?

Mr. Jenkin: The hon. Gentleman is a student of these matters and he knows that the proposals in Cmnd. 8106 provide that those on supplementary benefit will have the option to retain weekly payment. However, I am still considering the many comments raised on the point that the hon. Gentleman has put to me and I shall be announcing my decision shortly.

Mr. Miller: Does my right hon. Friend agree that we should be aiming at widening choice for those in receipt of benefits and that the subject should not be mixed up with the future financial viability of post offices, which is a separate topic and which should be dealt with separately?

Mr. Jenkin: With the best will in the world, I have to say to my hon. Friend that these questions are inevitably linked and I am having to consider them together. While attaching considerable importance to the question of choice, the Government must also have regard to the viability of the sub-post office network, about which we have made some firm commitments. That will certainly be one of the factors that I shall have very much in mind in any announcement that I make.

Mr. Buchan: Is not the right hon. Gentleman aware that over the past year or so the number choosing to take benefits weekly has gone up by about one-third, which suggests that there is real need in this area? Did not the Government pledge their support for the principle of freedom in social security and is not the hon. Member for Bromsgrove and Redditch (Mr. Miller) right in saying that choice is the paramount consideration, because people could deal with their own problems in their own way if the Government, with their repressive legislation, would get off their backs?

Mr. Jenkin: The points made by the hon. Gentleman are in my mind, but I cannot accept that, for all time and for all purposes, there should never be any change in the administrative arrangements concerning the payments of social security benefits. That does not make sense, particularly if the system lands the taxpayer generally—and many of those concerned here are taxpayers—with extra and unnecessary costs. We have to hold a balance between what is fair to the taxpayer and what is fair to mothers with children.

Mr. Peter Bottomley: Is my right hon. Friend aware that I support the idea of choice? Can he say how long it would take to make arrangements for people to receive child benefit monthly?

Mrs. Renée Short: That can happen now.

Mr. Jenkin: As the hon. Lady says, anyone who wishes to draw child benefit monthly is free to do so. A surprising number already does so. The new choice that we want to offer, not only to mothers receiving child benefit but to pensioners, is the option to have their benefits paid into their bank account by the modern cash


transmission method of automated credit transfer. I hope to be able to offer that option to beneficiaries during the next couple of years.

Mr. Ennals: The Secretary of State has already said that if he were to deny mothers the opportunity, if they want it, to draw their supplementary benefit weekly, he would be denying them freedom of choice. Is he not aware that the Select Committee of which my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) is the chairman strongly recommended that this choice should remain for women who felt that they needed to receive the payment every week?

Mr. Jenkin: That is one of the factors that I have in mind.

Single Parents

Mr. Freud: asked the Secretary of State for Social Services what further representations he has received on the questions asked of claimants for supplementary benefit who are single parents concerning their personal and private circumstances by visiting officers of his Department; and what changes he intends to make in the procedure in the light of those representations.

The Under-Secretary of State for Health and Social Security (Mrs Lynda Chalker): In all, my right hon. Friend has received 25 letters, including 18 from hon. Members. There have also been 26 questions in the House from nine hon. Members. The hon. Member will be aware that I have arranged for these procedures to be examined. I hope to make an announcement shortly on the outcome of that examination.

Mr. Freud: I am grateful for that reply. Will the Minister accept, however, that some of the questions asked were unacceptable in a non-police State?

Mrs. Chalker: I accept that there was grave concern. I must, however, draw attention to the fact that these questions are asked only in cases where the mother wishes the Department to take legal action for the financial support of the child by its alleged father. In such legal proceedings, the Department would be erring in its duty if it did not present the case fully. I can, perhaps, reassure the hon. Gentleman by saying that in the 90,000 cases where supplementary benefit is paid, involving illegitimate children, only 714 cases were taken under section 19 procedures of the Supplementary Benefits Act 1976.

Mr. Buchan: Is the hon. Lady aware that the first part of her answer pleased hon. Members? We were, however, rather disappointed with the second part. These questions are surely quite monstrous. If the legal profession desires to pursue these prurient matters, it should not be encouraged by the Department of Health and Social Security. I wish the hon. Lady every success in getting these questions changed or withdrawn.

Mrs. Chalker: We were reviewing procedures long before The Sunday Times article appeared. The same questions have been asked, in one form or another, over the last two decades. It is right that where there is a father he shall remain, as the Act says, responsible for the maintenance of the child.

National Health Service (Contracts)

Mr. Dobson: asked the Secretary of State for Social Services how many contracts for the use of National Health Service services by private establishments have been entered in the North-East Thames regional health authority.

Mr. Sheerman: asked the Secretary of State for Social Services how many contracts for the use of National Health Service services by private establishments have been entered into in the West Yorkshire regional health authority.

Sir George Young: The information is not available centrally, but the hon. Member may like to seek it from the health authority concerned.

Mr. Dobson: Will the Minister say what steps his Department takes to vet the financial propriety of some of the dubious American companies seeking to enter into these arrangements with the NHS with a view to making profits as parasites on the NHS?

Sir George Young: The arrangements to which the hon. Gentleman refers were enshrined in the National Health Service Act 1977. It is for local health authorities to satisfy themselves about the propriety of the companies concerned.

Paul Hardman

Mr. Spriggs: asked the Secretary of State for Social Services if, having regard to the case of Paul Hardman of 4 Landsbury Avenue, Parr, St. Helens, whose parents received one document which contained incomplete paragraphs, other relevant documents which were incomplete, and others which were hardly legible, he will ensure that his Department always provides clear and conclusive information to the parents of vaccine damaged children upon request.

Sir George Young: In dealing with vaccine damage payment claims every effort is made to obtain and provide all available information, but in some cases relevant documents have unfortunately been destroyed.
In the case referred to, some hospital records were available only in microfilm form and certain words were unclear. But these related to the period immediately following Paul Hardman's neurological illness, while the tribunal decision was based on the interval of time between the vaccination and the onset of the illness.

Mr. Spriggs: Is the Minister aware that until the father of this boy saw his Member of Parliament about the Department's refusal or inability to supply the necessary information that parent was unable to gather any information on which to base an appeal? On taking the matter up with the Department, I was only able to get some information but not all of it. Will the Secretary of State and the Under-Secretary take steps to ensure that the medical officer of health, who was in a position to give the necessary evidence on behalf of Paul Hardman, is brought forward?

Sir George Young: The hon. Gentleman has acted commendably in taking up this constituency case. Both my right hon. Friend and I have gone through the file in some detail. The suggestion that the hon. Gentleman has made is a matter for the tribunal and not for Ministers.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Meacher: asked the Prime Minister if she will list her official engagements for 5 May.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today.

Mr. Meacher: Two years ago yesterday, the Prime Minister quoted St. Francis and talked about bringing faith, hope and harmony to this country. Can the right hon. Lady deny, having brought about the highest level of unemployment since 1934, the biggest jump in unemployment in one year since 1930, the biggest fall in total output in one year since 1931 and the biggest collapse in industrial production in one year since 1921, that she heads the most hated Tory Government this country has known for at least two generations?

The Prime Minister: I can most certainly deny that. Most people in this country realise that the steps that have been taken were necessary to put industry in a healthy condition to compete. If the Government had not had the courage to take such steps long-term unemployment in this country would have been much worse.

Sir John Eden: Will my right hon. Friend make clear to the Heads of any friendly Governments, especially the Prime Minister of the Irish Republic and the President of the United States, that they have a direct interest in the defeat of terrorism anywhere in democracies? Does she agree that these Heads of Government should be seen to be helping us and helping her in the stand that she takes against terrorism in Northern Ireland?

The Prime Minister: I am grateful for what my right hon. Friend says. The Government's job always is to protect the law-abiding, and to defeat terrorism. To grant political status would be to give a licence to kill. That is why this Government will never grant political status, no matter what the extent of any hunger strike.

Mr. David Steel: Arising from the NATO Ministers' meeting at the weekend, may I ask the right hon. Lady to give her active personal support to the resumption of talks between the Soviet Union and the United States on a reduction in the horrific stockpiles of nuclear weapons in the world?

The Prime Minister: That has been the policy of the Government since the NATO meeting that first enunciated the policy, that there should be talks with the Soviet Union on the reduction of theatre nuclear weapons. It would greatly assist matters if the Soviet Union were to stop positioning an extra SS20 every five days.

Mr. Michael Spicer: In view of the lobby at present assembling at the House, will my right hon. Friend confirm that, if private flows are taken into account, this country ranks second only to the United States in its contribution to developing countries?

The Prime Minister: That is so. Private flows of capital from this country to developing countries amount to just over £4 billion. Added to official flows of £1 billion a year, this means that our total GNP proportion is 2·8 per cent., a very good record and second in the world.

Mr. Foulkes: asked the Prime Minister, if she will list her official engagements for Tuesday 5 May.

The Prime Minister: I refer the hon. Gentleman to the reply which I gave some moments ago.

Mr. Foulkes: Is the Prime Minister aware that unemployment in the Cumnock area is now 17 per cent.? Does she know that a carpet factoy is now threatening closure, but, despite that, the Secretary of State for Scotland refused to meet the local authorities in Ayrshire to discuss unemployment? Will she either instruct him so to do, or get someone to do the job who is prepared to do it properly?

The Prime Minister: Most departmental Ministers see that one of their Ministers receives deputations. As the hon. Gentleman knows, I received him when he had a complaint about a closure. There was a happy ending on that occasion, because the closure did not take place.

Mrs. Knight: When the Prime Minister answers questions about terrorism from persons or statesmen throughout the world, will she make clear repeatedly that this country is a democracy and that there cannot be political prisoners in a democracy because in democratic countries people do not go to prison not for their political beliefs but for the crimes that they have committed?

The Prime Minister: I wholly agree with my hon. Friend. In a democracy people can pursue their objectives by peaceful means. Only those people who reject democracy pursue their objectives by terrorist means. Terrorism is a crime and always will be a crime.

Mr. Molyneaux: Is the Prime Minister aware that her firmness and determination, steadily supported by Her Majesty's Opposition, have laid a firm foundation for the restoration of public confidence in Northern Ireland?

The Prime Minister: I am grateful to the hon. Member. I believe that we have the support of virtually the whole House in the action and the stand that we have taken.

Mr. Foot: The whole country's affairs have been darkened by the events that have taken place in Northern Ireland, about which we must all be concerned. In my view—and, I believe, in the view of the vast majority of hon. Members certainly on the Labour side of the House—the central question concerns conceding political status. That cannot be done without the Government giving sure aid to the recruitment of terrorists. If political status were conceded, it would greatly increase the numbers who would be encouraged to join. That, in turn, would mean a great increase in the number of innocent people who would be killed. We believe that matters in Northern Ireland, as elsewhere in the country, should be settled democratically, and not at the point of a gun.

The Prime Minister: I am grateful to the right hon. Gentleman. As I said, to concede political status would be to grant a licence to kill innocent men, women and children, and that is why we shall never concede that status.

Mr. Kilfedder: Does the Prime Minister realise that the Ulster people will not respond to the vicious propaganda of the Irish Republican Army, and that that is due, in part, to the strong and unequivocal attitude adopted by the Government and by the House? Will the


Government take action to win the propaganda battle? Is she aware that foreign television crews in Northern Ireland are putting out the wrong version of what is happening there, and paying youths to throw stones and other missiles at the security forces and then televising scenes which are being shown in their own countries?

The Prime Minister: What has been said in the House today, and the unity with which the House has approached the problem in its determination to stamp out terrorism, will help the case of the Government, the parliamentary system and democracy throughout the world.

Mr. Duffy: Is the Prime Minister aware that one of the difficulties in Ireland is that there has always been too much "me too-ism" in the House of Commons on the subject? Is she aware of the widespread impression overseas—notably on the part of the New York Times, until recently a stout ally of this country's policy on Northern Ireland—that the death of Mr. Sands whom you, Mr. Speaker, have already described this afternoon as a fellow Member of Parliament will be due to the right hon. Lady's intransigence?

Mr. Robert Atkins: Shame.

Mr. Duffy: Is the Prime Minister further aware that by appearing hard and unfeeling or "firm and determined" she has spectacularly illuminated for growing bodies of opinion in neighbouring and allied countries, whose comments are flowing in hourly, her Government's moral bankruptcy and the colossal and criminal incompetence of Conservative Governments at all times in their dealings on Ireland?

The Prime Minister: Her Majesty's Government are on the side of protecting the law-abiding and innocent citizen and we shall continue in our efforts to stamp out terrorism. Mr. Sands was a convicted criminal. He chose to take his own life. It was a choice that his organisation did not allow to many of its victims.

Mr. Brotherton: asked the Prime Minister if she will list her official engagements for Tuesday 5 May.

The Prime Minister: I refer my hon. Friend to the reply which I gave some moments ago.

Mr. Brotherton: Is my right hon. Friend aware of the widespread and continuing support in the country for the firm stand taken by the Government on Civil Service pay? However, will she consider one problem that arises from Civil Service inaction, namely, the repayment of VAT? What advice would she give to constituents such as Mr. Brader of Little Grimsby in my constituency, who is owed £37,000—soon it will be £40,000—and who is in danger of going out of business? That would result in 15 to 20 jobs being lost in my constituency. As my right hon. Friend will recall, land drainage is an important part of Lincolnshire life.

The Prime Minister: I am grateful to my hon. Friend for raising the matter. About 500,000 claims for repayment of value added tax are pending, and this is an example of how those on strike in the Civil Service are

deliberately harming many small businesses. I have been in touch with the Treasury, the Customs and Excise and the Inland Revenue, and we are making the following arrangements. The Inland Revenue will not press the collection of PAYE when a company is in difficulties because it is awaiting a value added tax repayment. I hope that that will be a constructive and helpful step. Moreover, it will certify to repay the banks of those traders when a value added tax repayment is due. I hope that those two steps will assist traders who find themselves in difficulties as a result of the actions of the Civil Service. I hope that the Civil Service will soon desist, because if business is not prosperous we certainly cannot have a well-paid. Civil Service.

Mr. Christopher Price: Coming to problems rather nearer home, will the Prime Minister reconsider her remarks made soon after the Brixton problems when she said that unemployment was not a primary cause of the trouble? Is it not a mistake in any case for a Minister of the Crown to pre-empt an inquiry in deciding, before the inquiry takes place, what is or is not a cause of the trouble? Is the right hon. Lady aware that there is still a problem in South-East London, where unemployment is rising faster than in most parts of the country, and that the majority of that fast-rising unemployment is among young blacks?

The Prime Minister: No, Sir. Unemployment is certainly a problem. I do not believe that it was the prime cause of the Brixton riots.

Mr. Dickens: In view of the distasteful and disgraceful possibility that His Royal Highness the Prince of Wales had his telephone tapped in Australia when speaking to Her Majesty the Queen and to his fiancée, Lady Diana, will the Prime Minister now consider, during her busy day, whether to introduce a Bill of Rights, such as many hon. Members have wanted for years, to protect other Heads of State when visiting this country?

The Prime Minister: I do not know whether those stories about publication of telephone conversations are true. If they are, they are totally despicable, and I believe that the whole House would condemn any organisation which went ahead and published those conversations. A Bill of Rights is, however, a very much larger question.

Mr. Gordon Wilson: The Prime Minister said that she was making arrangements for prosperous businesses and others to receive VAT repayments. What arrangements do the Government intend to make to enable recipients of supplementary benefit, invalidity payments, pensions and so on to obtain those benefits from DHSS offices which are affected by the strike? Will she now make strong efforts to ensure that the dispute is settled or, alternatively, that those who are in need receive the money to which they are entitled?

The Prime Minister: I hope that the Civil Service will not withhold benefits from anyone who is in need of them. If it does so, that too would be totally and utterly despicable and it would be a great reflection upon the Civil Service.

London Government Reform (Abolition of the Corporation of the City of London)

Mr. Alfred Dubs: I beg to move,
That leave be given to bring in a Bill to reform London government by abolishing the Corporation of the City of London as a local government unit and to provide for its resources and functions to be transferred to one or more adjacent boroughs; and for related purposes.
In two days, the people of London will have their opportunity to vote in the forthcoming GLC elections. In that process, the residents of the City of London will be able to play their full and democratic part. But next year, when the people of London have their chance to vote in the local elections for the London borough councils, that democratic process will be denied to the people living in the City of London because each year the City of London will go through a different process of selecting its own form of local government. The intention of the Bill is to give the City of London the same type of democratic local government which the rest of the country has had for many years.
There is every reason why the City of London should conform to the rest of the country. The City of London has responsibilities for planning, housing, highways, refuse, social services, public health and all the other things which are the essence of local government. I am quite certain that the officers who work for the corporation of the City of London do a first class job.
However, the proposed Bill is about democracy. It is about doing away with patronage and privilege and having democratic local government. The Court of Common Council, which governs the City of London, consists of a Lord Mayor, 24 alderman and 138 Common Council men. The Lord Mayor is nominated by the livery voters of the City Guilds, such as fishmongers and coachmakers, masons and even skinners, although any connection with my hon. Friend the Member for Bolsover (Mr. Skinner) is purely coincidental.
The Lord Mayor is then elected by the Court of Aldermen, the aldermen themselves being elected for life if approved by the Lord Mayor and the existing aldermen—a filter, the like of which if applied to this House would have kept many of us out for ever. Indeed, given the set-up in the City of London, it can only be said that a latter-day Dick Whittington would never have made it to becoming Lord Mayor, and would have done much better to have stayed in Tower Hamlets, or perhaps Lambeth.
The Common Council men of the City of London are elected in 25 wards. There are 14,000 electors, of whom only 5,000 are residents. The vast majority—about 9,000—are on the voting lists of the City of London because they own or rent business premises. Indeed, in 22 of the 25 wards there are more non-resident than resident electors, and in only three of the wards do the residents outnumber the non-residents.
There is an enormous disparity in the size of the wards. The largest ward has 3,791 electors. That is a ward called Farringdon Without. The smallest ward, Candlewick, has 40 electors.
There are fewer than 100 electors in six wards. There are fewer than 10 residents on the voting list in five wards,

and there are fewer than 100 residents on the voting list in 19 wards. Women hardly feature at all in the voting lists of many of the wards in the City of London. I checked two of the wards. In Bassishaw there are four women on the voting list, and in the Candlewick ward there are only two women on the voting list.
To become a Common Council man, a candidate must be a Freeman of the City of London as well as being on the voting list, must own freehold or leasehold land in the City, or must have lived in the City in the previous 12 months. There are three ways of becoming a Freeman of the City of London. It can be done by servitude, which is a form of apprenticeship; it can be done by patrimony—in other words, to be the son or daughter of a Freeman; or it can be achieved by redemption or purchase.
In 1960 the Royal Commission on local government in Greater London looked into the question of the City of London and said in its conclusions:
If we were to be strictly logical we should recommend the amalgamation of the City and Westminster. But logic has its limits and the position of the City lies outside them.
That is why to this day the City of London has had a different and undemocratic form of local government. Royal Commissions are not always right, and in this case I believe that it was just plain wrong.
A submission to the Royal Commission, prepared by the Corporation of London in 1958, says:
In the national interest, Parliament has made provision for the preservation of ancient buildings, works of art, manuscripts and other things of historical importance. It would seem at least as important that ancient institutions should be preserved, particularly where they have been moulded by the centuries to serve modern needs. Parliament itself, no less than the Corporation of London, is an example of such an institution.
But even Parliament has modernised itself far more than the City of London, and at least the modernisation of Parliament is still a burning issue, certainly in the Labour Party. However, the City of London has hardly modernised itself at all. The argument used in that submission is the argument for protecting privilege and patronage over the ages.
The City of London is extremely rich. It has a high rateable value. If it were to be merged with adjoining boroughs there would be greater benefits to people who are not as affluent as many of those on the voting lists of the City of London. Furthermore, there is the question of what is called the City's cash, a sum of money not obtained through the rates which is disbursed by the corporation of the City of London and which ought to be available for the benefit of the people of London as a whole and not just for a small minority of them or a small part of London.
Indeed, it is clear that the City of London is well behind the times. It has a business and property vote, although it has been abolished in the rest of the country. It has aldermen, even though they have been abolished elsewhere. It has an undemocratic system of elections at a time when the rest of the country has become democratic in its local government.
The question of how the City of London should be split up between the adjoining boroughs is best left to the Committee stage of the proposed Bill. At this stage my inclinations are that it ought to merge with the borough of Tower Hamlets. However, several hon. Members representing constituencies in adjoining boroughs have already approached me and have made their pitch for the City of London to be merged with their local authority areas.
I am not a philistine. I hope that some of the ceremonial functions of the City will be retained under the new structure. I hope that there will be the ceremony of the Lord Mayor: it attracts the tourists; it is good for the balance of payments, I am not against it.
Essentially, the Bill is against privilege. I ask the House to support it in order to give the City of London the same form of democratic government which many years ago we gave the people of other parts of the country.

Mr. Tony Durant: I rise to oppose the motion on behalf of my hon. Friend the Member for City of London and Westminster, South (Mr. Brooke) who, because of his position in the House, is unable to speak. I have no interest in the matter. I am not a stockbroker and I do not have any financial interests in the City so I can speak honestly and openly.
There are four good reasons why the motion should be opposed. First, it is a blatant political move prior to the GLC elections on Thursday. Secondly, the need to reform the City of London has not yet been proved, as a number of commissions have stated. Thirdly, the importance of the City of London to the nation and to the world is beyond comprehension. It is most important to Britain. Fourthly, reform of local government is not always a success, as many of us have felt for some time.
The hon. Member for Battersea, South (Mr. Dubs) made a blatant speech prior to the GLC elections. The last time that the matter was raised in March 1977—once again prior to the GLC elections—by Mr. Bryan Davies, who then represented Enfield, North. It was raised in 1965 by the former Member for Putney Mr. Hugh Jenkins, who is now in another place. Both gentlemen lost their seats. Perhaps that is a lesson of which the hon. Gentleman should be careful.
As is commonly known, the City occupies an important part of our constitution. It is an important square mile which houses financial, industrial and commercial centres of the world. It is important to us all. It is a unique place with high integrity, skills and expertise. It earns millions of pounds for Britain. The world watches and studies its actions. Its history goes back 2,000 years to Roman times. Its first main charter was granted by William the Conqueror. It was a port and a commercial centre for Britain for many years. Parliament granted it powers to elect its mayor and Magna Carta confirmed its separate identity.
The City of London has always been a defender of individual rights. It took into its care the five Members of Parliament who were attacked by the King when he entered the Chamber many hundreds of years ago. In the reign of George III when the House rejected John Wilkes as a Member of Parliament because he attacked the monarchy, the City of London made him its mayor three times in a row. It certainly looks after the rights of its citizens. The City has grown in importance. It employs 540,000. I admit that only 4,000 live in the City, but 540,000 work there. The City is important to them.
This matter has been examined many times. An inquiry in 1887 suggested that the City took over the surrounding areas—that would be an interesting position. An inquiry in 1854 decided to leave the City of London alone. There have been many inquiries since the war. Lord Reading, one of my distinguished predecessors in my constituency, chaired a committee considering the matter in 1945, which

found the terms of reference too narrow. A Royal Commission was established, as the hon. Member for Battersea, South mentioned, which looked at the whole of Greater London. It recommended leaving the Corporation of London as it was because of its unique character. It is important to Britain.
The argument put forward by the hon. Gentleman is that the City of London is undemocratic. Its traditions are long and well-established. I sometimes question whether it does not work better than many of the things that we do in this place. We do not always make a success of what we do in the Chamber. The City looks at itself democratically and is trying to extend the franchise. It accepts that the number of resident electors is small, and that it must recognise the large numbers who work there and who need a voice in that important city.
The hon. Gentleman talked about the City's wealth. It provides one-eighth of the GLC's budget and 21 per cent. of ILEA's money, which is a credit to the City. It requires for its administration only £55 million. If the hon. Gentleman wants to break up the City and give it to the neighbouring boroughs he should remember that they are heavily in debt, especially in the north, east and south. There would have to be an almost immediate rate increse which would act as a deterrent to industry and business in the City. They would have to consider moving elsewhere. Rates have a bearing on where people work, as is shown in South Yorkshire and other places where businesses have been moving out because of high rates.
It is in the interests of the nation to maintain the City Corporation. It costs nothing. It raises money to pay for the pageantry mentioned by the hon. Gentleman. It supports the City schools, it runs Billingsgate and Smithfield and it spends £1 million a year on open spaces, especially in Epping Forest and Burnham Beeches. It maintains the four bridges into the City. Would the hon. Gentleman's borough care to take on the maintenance of those bridges? It runs the Guildhall School of Music, reputable establishment. It built the Barbican.
The Opposition often criticise the City corporation, but however, it is interesting to note that the Labour Front Bench seldom speaks on the matter. When the right hon. Member for Stepney and Poplar (Mr. Shore) carried out his' organic development—or whatever he called it—during the last Government he never mentioned the City of London. Two former Labour Prime Ministers have accepted the freedom of the City—Lord Attlee and the right hon. Member for Huyton (Sir H. Wilson). They both accepted it gladly and were honoured to take their place among the other Freemen.
The motion is a political move, which happens regularly before GLC elections. It should be thrown out. Reform of local government since the war has not been a great success. I say that as someone not keen on the legislation put through by my party. Tampering with local government has never been a success since the war, and the motion would make the matter worse. I urge my right hon. and hon. Friends to vote against this mean little measure.

Mr. Peter Rost: On a point of order, Mr. Speaker. As a Freeman of the City of London, I wonder whether you could give me guidance. I gather that I am not alone in that position. As the


proposed Bill would abolish the rights and privileges of Freemen of the City, is it proper that Freemen on either side of the House should vote on the matter?

Mr. Speaker: Before I answer that point, I should tell the House that I am a member of the ancient order of blacksmiths in the City of London—and I am very proud of that. I am a Freeman of the City of London. I do not intend to vote—at least, I do not expect that I shall be called upon to vote. I do not see any direct pecuniary interest for any hon. Member. Whether to vote is a matter of judgment for each hon. Member.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—

The House divided: Ayes 155, Noes 236.

Division No. 167
3.49 pm


AYES


Anderson, Donald
Graham, Ted


Ashley, Rt Hon Jack
Grant, George (Morpeth)


Barnett, Guy (Greenwich)
Hamilton, James (Bothwell)


Barnett, Rt Hon Joel (H'wd)
Hamilton, W. W. (C'tral Fife)


Benn, Rt Hon A. Wedgwood
Harrison, Rt Hon Walter


Bennett, Andrew(St'kp't N)
Hart, Rt Hon Dame Judith


Bidwell, Sydney
Hattersley, Rt Hon Roy


Booth, Rt Hon Albert
Haynes, Frank


Bottomley, Rt Hon A.(M'b'ro)
Healey, Rt Hon Denis


Bradley, Tom
Heffer, Eric S.


Brown, Hugh D. (Provan)
Hogg, N. (E Dunb't'nshire)


Buchan, Norman
Holland, S. (L'b'th, Vauxh'll)


Campbell, Ian
Home Robertson, John


Carmichael, Neil
Homewood, William


Carter-Jones, Lewis
Horam, John


Cartwright, John
Huckfield, Les


Clark, Dr David (S Shields)
Hughes, Robert (Aberdeen N) 


Cocks, Rt Hon M. (B'stol S)
Hughes, Roy (Newport)


Cohen, Stanley
Janner, Hon Greville


Coleman, Donald
Jay, Rt Hon Douglas


Concannon, Rt Hon J. D.
John, Brynmor


Cook, Robin F.
Jones, Barry (East Flint)


Cowans, Harry
Jones, Dan (Burnley)


Cox, T. (W'dsw'th, Toot'g)
Kaufman, Rt Hon Gerald


Craigen, J. M.
Kerr, Russell


Cryer, Bob
Kilroy-Silk, Robert


Cunliffe, Lawrence
Kinnock, Neil


Cunningham, Dr J. (W'h'n)
Lambie, David


Dalyell, Tam
Lamond, James


Davidson, Arthur
Leighton, Ronald


Davis, Clinton (Hackney C)
Lestor, Miss Joan


Davis, T. (B'ham, Stechf'd)
Lewis, Ron (Carlisle)


Deakins, Eric
Lyon, Alexander (York)


Dean, Joseph (Leeds West)
McCartney, Hugh


Dixon, Donald
McDonald, Dr Oonagh


Dobson, Frank
McKelvey, William


Dormand, Jack
McNamara, Kevin


Douglas-Mann, Bruce
Magee, Bryan


Dubs, Alfred
Marshall, Dr Edmund (Goole)


Duffy, A. E. P.
Marshall, Jim (Leicester S)


Dunwoody, Hon Mrs G.
Mason, Rt Hon Roy


Edwards, R. (W'hampt'n S E)
Meacher, Michael


English, Michael
Mikardo, Ian


Evans, loan (Aberdare)
Millan, Rt Hon Bruce


Evans, John (Newton)
Miller, Dr M. S. (E Kilbride)


Field, Frank
Mitchell, R. C. (Soton Itchen)


Flannery, Martin
Morris, Rt Hon A. (W'shawe)


Fletcher, Ted (Darlington)
Morton, George


Foot, Rt Hon Michael
Mulley, Rt Hon Frederick


Forrester, John
Newens, Stanley


Foster, Derek
O'Halloran, Michael


Foulkes, George
O'Neill, Martin


Garrett, John (Norwich S)
Owen, Rt Hon Dr David


Gilbert, Rt Hon Dr John
Pavitt, Laurie


Golding, John
Penhaligon, David





Powell, Raymond (Ogmore)
Summerskill, Hon Dr Shirley


Prescott, John
Thomas, Dafydd (Merioneth)


Price, C. (Lewisham W)
Thomas, Dr R. (Carmarthen)


Richardson, Jo
Thorne, Stan (Preston South)


Roberts, Allan (Bootle)
Tilley, John


Roberts, Ernest (Hackney N)
Tinn, James


Roberts, Gwilym (Cannock)
Torney, Tom


Robertson, George
Urwin, Rt Hon Tom


Rooker, J. W.
Varley, Rt Hon Eric G.


Roper, John
Walker, Rt Hon H.(D'caster)


Ross, Stephen (Isle of Wight)
Weetch, Ken


Sandelson, Neville
Welsh, Michael


Sheerman, Barry
White, Frank R.


Sheldon, Rt Hon R.
White, J. (G'gow Pollok)


Short, Mrs Renée
Wigley, Dafydd


Silkin, Rt Hon J. (Deptford)
Willey, Rt Hon Frederick


Silverman, Julius
Williams, Rt Hon A.(S'sea W)


Skinner, Dennis
Winnick, David


Spearing, Nigel
Woolmer, Kenneth


Spriggs, Leslie
Young, David (Bolton E)


Stallard, A. W.



Stoddart, David
Tellers for the Ayes:


Stott, Roger
Mr. Reg Race and


Strang, Gavin
Mr. Clive Soley.


Straw, Jack





NOES


Adley, Robert
Douglas-Hamilton, Lord J.


Alison, Michael
Dover, Denshore


Arnold, Tom
du Cann, Rt Hon Edward


Atkins, Robert (Preston N)
Durant, Tony


Atkinson, David (B'm'th.E)
Dykes, Hugh


Baker, Kenneth (St.M'bone,)
Eden, Rt Hon Sir John


Banks, Robert
Edwards, Rt Hon N. (P'broke)


Beaumont-Dark, Anthony
Eggar, Tim


Beith, A. J.
Elliott, Sir William


Bendall, Vivian
Eyre, Reginald


Bennett, Sir Frederic (T'bay)
Fairbairn, Nicholas


Benyon, Thomas (A'don)
Fairgrieve, Russell


Benyon, W. (Buckingham)
Faith, Mrs Sheila


Berry, Hon Anthony
Fell, Anthony


Best, Keith
Fenner, Mrs Peggy


Biffen, Rt Hon John
Fisher, Sir Nigel


Biggs-Davison, John
Fletcher, A. (Ed'nb'gh N)


Blackburn, John
Fletcher-Cooke, Sir Charles


Blaker, Peter
Fookes, Miss Janet


Body, Richard
Forman, Nigel


Boscawen, Hon Robert
Fox, Marcus


Bottomley, Peter (W'wich W)
Freud, Clement


Bowden, Andrew
Gardiner, George (Reigate)


Boyson, Dr Rhodes
Garel-Jones, Tristan


Bright, Graham
Glyn, Dr Alan


Brinton, Tim
Goodhart, Philip


Brittan, Leon
Goodhew, Victor


Brooke, Hon Peter
Goodlad, Alastair


Brotherton, Michael
Gorst, John


Brown, Michael (Brigg &amp; Sc'n)
Gow, Ian


Browne, John (Winchester)
Gower, Sir Raymond


Bruce-Gardyne, John
Grant, Anthony (Harrow C)


Bryan, Sir Paul
Gray, Hamish


Buchanan-Smith, Alick
Griffiths, Peter Portsm'th N)


Buck, Antony
Grimond, Rt Hon J.


Budgen, Nick
Grist, Ian


Burden, Sir Frederick
Gummer, John Selwyn


Butcher, John
Hamilton, Hon A.


Carlisle, John (Luton West)
Hamilton, Michael (Salisbury)


Carlisle, Kenneth (Lincoln)
Hannam, John


Chalker, Mrs. Lynda
Haselhurst, Alan


Chapman, Sydney
Hastings, Stephen


Churchill, W. S.
Hawkins, Paul


Clark, Sir W. (Croydon S)
Hawksley, Warren


Clarke, Kenneth (Rushcliffe)
Hayhoe, Barney


Clegg, Sir Walter
Henderson, Barry


Cockeram, Eric
Higgins, Rt Hon Terence L.


Cope, John
Holland, Philip (Carlton)


Cormack, Patrick
Hooson, Tom


Corrie, John
Howell, Rt Hon D. (G'ldf'd)


Costain, Sir Albert
Howell, Ralph (N Norfolk)


Critchley, Julian
Hunt, David (Wirral)


Dickens, Geoffrey
Hunt, John (Ravensbourne)






Hurd, Hon Douglas
Kilfedder, James A.


Jenkin, Rt Hon Patrick
Kimball, Marcus


Jessel, Toby
King, Rt Hon Tom


Jopling, Rt Hon Michael
Knight, Mrs Jill


Lamont, Norman
Rifkind, Malcolm


Lang, Ian
Rippon, Rt Hon Geoffrey


Latham, Michael
Roberts, M. (Cardiff NW)


Lawson, Rt Hon Nigel
Roberts, Wyn (Conway)


Le Marchant, Spencer
Rossi, Hugh


Lennox-Boyd, Hon Mark
Rost, Peter


Lester, Jim (Beeston)
Sainsbury, Hon Timothy


Lloyd, Peter (Fareham)
St. John-Stevas, Rt Hon N.


Loveridge, John
Shaw, Giles (Pudsey)


Lyell, Nicholas
Shaw, Michael (Scarborough)


McCrindle, Robert
Shelton, William (Streatham)


MacGregor, John
Shepherd, Colin (Hereford)


MacKay, John (Argyll)
Shersby, Michael


McNair-Wilson, M. (N'bury)
Silvester, Fred


McQuarrie, Albert
Sims, Roger


Marland, Paul
Skeet, T. H. H.


Marlow, Tony
Smith, Dudley


Marten, Neil (Banbury)
Speller, Tony
 
Mates, Michael
Spicer, Jim (West Dorset)


Mather, Carol
Spicer, Michael (S Worcs)


Maude, Rt Hon Sir Angus
Stanbrook, Ivor


Mawby, Ray
Stanley, John


Mawhinney, Dr Brian
Steel, Rt Hon David


Maxwell-Hyslop, Robin
Steen, Anthony


Mayhew, Patrick
Stevens, Martin


Mellor, David
Stewart, Ian (Hitchin)


Meyer, Sir Anthony
Stewart, A.(E Renfrewshire)


Miller, Hal (B'grove)
Stokes, John


Mills, Iain (Meriden)
Stradling Thomas, J.


Mills, Peter (West Devon)
Tapsell, Peter


Moate, Roger
Temple-Morris, Peter


Molyneaux, James
Thatcher, Rt Hon Mrs M.


Monro, Hector
Thomas, Rt Hon Peter


Montgomery, Fergus
Thompson, Donald


Moore, John
Thornton, Malcolm


Morris, M. (N'hampton S)
Townend, John (Bridlington)


Morrison, Hon C. (Devizes)
Townsend, Cyril D, (B'heath)


Morrison, Hon P. (Chester)
Trippier, David

 
Murphy, Christopher
van Straubenzee, W. R.


Myles, David
Vaughan, Dr Gerard


Neale, Gerrard
Viggers, Peter


Needham, Richard
Waddington, David


Nelson, Anthony
Wainwright, R.(Colne V)


Neubert, Michael
Wakeham, John


Newton, Tony
Walker, B. (Perth)


Onslow, Cranley
Waller, Gary


Osborn, John
Walters, Dennis


Page, John (Harrow, West)
Ward, John


Page, Rt Hon Sir G. (Crosby)
Warren, Kenneth
 
Patten, Christopher (Bath)
Watson, John


Patten, John (Oxford)
Wells, John (Maidstone)


Pawsey, James
Wheeler, John


Pink, R. Bonner
Whitelaw, Rt Hon William


Pollock, Alexander
Wickenden, Keith


Powell, Rt Hon J.E. (S Down)
Wilkinson, John


Prentice, Rt Hon Reg
Williams, D.(Montgomery)


Price, Sir David (Eastleigh)
Wolfson, Mark


Proctor, K. Harvey
Young, Sir George (Acton)


Pym, Rt Hon Francis
Younger, Rt Hon George


Rathbone, Tim



Rees, Peter (Dover and Deal)
Tellers for the Noes:


Rees-Davies, W. R.
Mr. Bob Dunn and


Rhodes James, Robert
Mr. John Heddle.

Question accordingly negativated.

Orders of the Day — Finance Bill

(Clauses 1, 4, 19, 23, 27, 29, 88, 89 and 122; and schedules 1, 2 and 11.)

Considered in Committee [Progress 30 April]

[MR. BRYANT GODMAN IRVINE in the Chair.]

Clause 23

PERSONAL RELIEFS

4 pm

Mr. Robert Sheldon: I beg to move amendment No. 16, in page 13, line 8, leave out subsection (1).

The First Deputy Chairman: With this we shall take the following amendments: No. 17, in page 13, line 9, after '1981–82', insert 'except for age allowance'.
No. 18, in page 13, line 9, after '1981–82', insert 
`except for income limit for age allowance'.
No. 56, in page 13, line 9, at end add
'except for women aged 60–64 years the personal relief shall be £1,425'.

Mr. Sheldon: The debate centres on the Rooker-Wise amendment, or, as some people might call it, the Rooker-Wise-Lawson amendment, if the right hon. Member for Blaby (Mr. Lawson) wants to claim responsibility for his earlier actions. In attributing credit or responsibility, the great credit goes to Mr. Rooker and Mrs. Wise because it is easy for an Opposition to oppose such matters; the greatest difficulty is for Government Back Benchers. I recall the assiduous attendance of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) in Committee four years ago. I said on that occasion that if inflation were to be high and were to be continuous, indexation would necessarily come about. However, at that stage, it was not so easy to foresee with certainty that inflation would be high and continuous, as we have come to observe.
The Rooker-Wise amendment was not about uprating personal allowances, because that had gone on for many years. If we look at the period since the early 1970s when inflation started reaching higher levels than during the previous decade, we can see that in 1975 the single person's allowance was increased by about 8 per cent., and the married allowance was increased by about 10 per cent. in 1976. Rather higher increases in personal allowances were made. In 1977 there was the Rooker-Wise amendment and in 1978 there were further increases in the personal allowances. Those form a feature of the levels of taxation, almost since there were first personal allowances in income tax. That had to take into account the inflation which existed even before modern times. Therefore, there was nothing new about that aspect of the Rooker-Wise amendment.
The Rooker-Wise amendment went further than that. It was not just about increasing the personal allowances but about the principle of indexing them in line with the cost of living. If there were that situation today, perhaps the


Financial Secretary would consider the tax and prices index. He would be faced with a higher index than the one on which Rooker-Wise is based.
When the Rooker-Wise amendment was discussed in Committee, I recall saying to our Whips that that move by my two distinguished hon. Friends was likely to cost the Revenue about £500 million. I confess that I underestimated both the determination and the ability of my hon. Friend for Perry Barr, who produced a revenue loss of £1,000 million, for good reasons. The Rooker-Wise annual indexation was modified by the Financial Secretary, who introduced the question of an order which allowed the decision to be modified. I never thought that the order was all that important. In fact, we see it as part of a Finance Bill because once a Chancellor of the Exchequer comes to any view he has the instrument ready to hand, which is the current year's Finance Bill, which he can use and which we see is being used on this occasion.
If we had had the Rooker-Wise amendment, we would have had an increase in the single person's allowance from £1,375 to £1,585 and in the married allowance from £2,145 to £2,475 with all the other allowances to which the Rooker-Wise amendment refers also being similarly uprated. Today we are seeing the first denial of that uprating, which is written into our legislation. It is interesting that that denial comes through a Government who wanted not an uprating, but the full indexed uprating, or possibly even now—if they were free to consider the matter in that way, assuming that their views are the same—they would want the full tax and price index uprating.
Three attitudes could have been detected when we engaged in those indexation arguments. The first was that at that time the Government looked to personal allowances as a Budget judgment. They were not concerned so much with future Finance Bills, because those could take care of themselves, as we have seen on this occasion. Secondly, my hon. Friend the Member for Perry Barr rightly wished to help the lower paid and to show his commitment to them. He was successful in both objectives.
Thirdly, the Conservative Opposition were conducting a spurious—perhaps it was a little more plausible at that time—moral crusade about the truth in taxation. One only has to read those debates to see fully their commitment to the principle of uprating those personal allowances, not by some arbitrary amount, but by the full amount shown to be necessary by the retail price index. A faint echo of that anger was shown by the present Chancellor of the Exchequer, who said on the Report stage of the Finance Bill in 1977:
That is why truth in taxation is important. By failing to keep personal allowances in line with the dreadful ravages inflicted by inflation, the Government have extended the range of disincentives and deepened the proverty trap. Social benefits have risen with full indexation, while personal tax thresholds have not. Therefore, more people are moving into the band where their earnings in work hardly exceed their earnings out of work.
He went on to say that
the real thief is inflation. It is the promoter of this increased burden of taxation and we are angry"—
in those days, it was rare for the right hon. and learned Gentleman to use that word—
because, due to the Treasury's failure to change the tax system in line with inflation, the Treasury itself becomes the main body

to profit from the inflation that it has failed to check. The House should feel quite entitled to impose the indexation obligation on the Government".—[Official Report, 25 July 1977; Vol. 936, c. 70.]
My goodness, times have changed. The Government have failed not only to index, but to raise allowances at all. That is wholly out of line with what was practised before that great morality descended upon us. Before then it was normal and standard practice to increase allowances year by year. There has been a failure to uprate at all, even by a small amount. When I think of the lofty and pious words used in Committee Room No. 10 in 1977, I do not understand why the Government did not use a fig-leaf of at least a few per cent., which would still have been one of the lowest increases in modern times, to show concern for the lower income groups.
The failure to raise the ceiling affects not only those in work, which is the worst aspect of it. As the Chancellor said, some people in work have had fairly reasonable pay increases, although others have not. The Chancellor argues that, as some people have done fairly well, it is reasonable not to give everyone the anticipated uprating. That argument is unacceptable, especially when we consider old people.
This is also the first time that the Government have failed to increase the age allowance, which was introduced in November 1974 to replace the old age exemption. It is a useful allowance. It is given to those over 65 with a yearly income of between £2,895 and £5,900. With the ordinary personal allowance for a married couple at only £2,145, it was a great help. Many old people naturally expected a full uprating. Some might have been sufficiently misguided to believe that a Government who believed in reducing taxation would make even more available. However, the level of their taxation was not even kept the same—and they do not even come into the categories mentioned by the Chancellor.
In his Budget Statement, the Chancellor said that under normal circumstances he would have had to increase all allowances by 15 per cent. He went on
The incomes of most people have been rising in both money and real terms, but many companies have seen their profits virtually disappear, with serious implications for jobs and investment. In these circumstances it will not be possible this year to make any increases in the income tax allowances or rate bands."—[Official Report, 10 March 1981; Vol. 1000, c. 774.]
Old people have not been getting those big increases. People in work may be fortunate enough to have received a considerable wage increase or they may be able to work overtime or to do a part-time job, but most old people do not have those options. They can only hope to maintain their standard of living by an increase in their State pension, by a reduction in income tax or by an increase in the age allowance.
The Government may argue that the Budget applies only to this year, but they must recognise that a number of old people will not be alive next year to take advantage of anything that may be offered. The Government could at least have maintained the level of income tax for old people, and they should not have clipped the edges of the pension, which is another unhappy feature of what they have done. It is one of the more shameful aspects of a shameful Finance Bill not to give anything to old people.
4.15 pm
The report on low pay from which I quote is well presented and will provide consderable material for further


investigation by the Government and others interested. It considers a number of issues resulting from the income tax changes or lack of changes. It states:
the level of income at which a typical family starts to pay tax has fallen from 44·7 per cent. of average earnings to an estimated 38 per cent. in November 1981…
the proportion of a low paid family's earnings taken in income tax and national insurance contributions has increased from 21·9 per cent. to 23·6 per cent…
the number of families with children in the 'poverty trap' has increased by 40 per cent.
Those are terrible indictments of the Government. The Government's action has resulted in a substantial decline in net pay.
Taking the tax threshold as a percentage of average earnings, in the 1950s it was almost 100 per cent. It declined to about 70 per cent. in the 1960s and to 50 per cent. in the 1970s. It is now estimated to be only 38 per cent. Who does that affect? A married couple with two children—the example that I have already given—will find that this is the harshest Government so far in post-war years in taxing those with modest incomes.
The Conservatives claimed that they would be a Government of low taxation. As the figures and statistics continue to pour out and as they become more widely understood, the full implications of what the Government are doing will become more apparent.
Governments normally take steps to diminish particular disadvantages of certain groups. Amendment No. 56 concerns women between the ages of 60 and 64. Even when trying to obtain as much revenue as possible, Governments normally take care when fixing benefits and income tax to keep such people out of income tax. They are aware that the shamefulness of taxing them is clear to everyone. As a result of the Government's failure to uprate, women with a State and earnings-related pension may find themselves subject to tax—and not a small amount. We are concerned with the tolerance level available to those who just come into tax. For example, if a person's income took him into a tax bracket by only £100, the tolerance level would allow him to keep the £30 tax.
The average graduated pension contribution for a woman was 52p a week. Women between 60 and 64 will not pay tax on the difference between their retirement pension and the graduated personal allowance but the graduated pension may require them to pay the tax on this and lose also the income tax tolerance of £100. That is what we are being asked to accept. We are being asked to ensure that such people will not just pay that small amount extra but will be liable to pay tax on the whole £100 of income, which is an additional £30. I hope that that was not the intention of the Ministers who framed this provision. If it was, perhaps they will tell us how they justify it and whether they intend to make changes on Report.
The amendment does not seek to deal with the many details. It deals merely with the general issue in this way because we know that more complicated requirements will need to be inserted in the Bill than this simple, two-line amendment. I hope that the Minister, when he replies, will tell us how the Government intend to deal with this matter.
All this presents a very sorry and a very different picture from the one that we were given to expect when it was first announced in 1977 and reaffirmed at the time of the 1979 election. Two years further on, we come to the ultimate reality of a Government who are trying to get money out

of these people and failing to revalorise even to the slightest extent. We must all regard that as shameful, because it is the lower paid and the old who will suffer.
I therefore ask my hon. Friends to support the amendment.

Mr. Richard Wainwright: As has been made clear, the clause which the Liberal Party seeks radically to amend would increase the income tax yield by some £2¼billion per year, because it is the vehicle for the Government's refusal to alter personal allowances in accordance with the rate of inflation over the past 12 months. For example, the allowance for a married man is to remain unchanged at £2,145 whereas, to take account of inflation, it should be £2,465.
The Committee should bear in mind the fact that at the same time as this blow is suffered, the rates of national insurance, which constitutes a tax, have also been raised. All this is completely contrary to the Prime Minister's solemn pledges, both during and after the election. Taken together with last year's deplorable abolition of the reduced rate of income tax, a subject to which I am glad that we shall return later today, the income tax increase under the clause means that pay, or indeed bare pension, of as little as £28 per week will be hit by 38 per cent. combined income tax and national insurance on its top slice.
Yet even now, some Conservative Members are still so brazen as to talk about incentives. I and my hon. Friends were motivated to table our amendment immediately the Bill had its Second Reading because, with national insurance, it constitutes a double attack on employment and the provision of jobs. As I have pointed out, pay as low as £28 per week—part-time pay and child's pay—will be hit by the clause, while at the same time 7¾ per cent. is payable under the increased national insurance contribution by the employees. That accounts for a total rate of 37¾ per cent. tax on the extra pounds earned by people on very low rates of pay. At the same time, the tax is made a double offence because of the huge 13¾ per cent. that the employer must pay in national insurance for those jobs. It cannot be right for a double tax on jobs to aggravate the present remorseless trend of increasing unemployment.
In case voices are raised about the possible need to replace the £2¼ billion which would be lost if the amendment were carried, I make it quite clear, as I tried to do both in the Budget debate and on Second Reading, that in our view a restoration of £2¼ billion to demand in the economy is a necessity at this time and should be welcomed. Any talk of trying to replace that tax yield is therefore entirely inappropriate.
I said that there is a double tax on jobs. One might legitimately speak of a treble tax on jobs, because the removal of £2¼ billion demand from the economy at this time will clobber trade and thus further aggravate unemployment. To take a random example, an enormous amount of textiles and clothing will go unbought if this huge amount of demand is deliberately sucked out of the economy. It is bound to result in a further loss of jobs in an already demoralised industry. As everyone knows, however, it goes further than that through the multiplier. When manufacturing businesses cannot even keep their older plant occupied, they have no reason and no funds to keep their machinery up-to-date and the demand for machinery suffers in its turn.
It is a descending spiral. The clause will reduce the tax base because industry will suffer, so that there will be less employment and thus a smaller tax base in the coming year.
I hope that the Government will eventually pause, although they have shown no sign so far of doing so, to realise the consequences in terms of erosion of industry and jobs for their own fiscal policy. Some may try to inject a little courage and to improve morale by saying "Never mind, it can be put right next year". I hope that the Committee will not fall for such a total delusion. In their own Red Book, issued with the Budget this year, the Government confess with brazen frankness that the scope for what is delicately called "implied fiscal adjustment" in 1982–83 is only £1 billion. The Committee should realise that if this year's indexing of personal allowances is lost, it will be lost forever. That thought should be intolerable to those who believe that there should be incentive and that low pay and bare pensions should not be subject to confiscatory raids of this kind.
Liberal Members therefore hope to be part of a considerable force of hon. Members who will support amendment No. 16 at the conclusion of the debate. For my part, considering the author of all this mischief, I agree with the Yorkshireman who said to me at the weekend, "Chancellor Howe should take an early bath".

Mr. John Horam: This is probably the most serious debate that we shall have on the Finance Bill. In this area the Government and Parliament can directly affect the lives of ordinary citizens. They can at a stroke in a Finance Bill clause reduce the standard of living. It is rare for Parliament to have such a dramatic effect on the lives of ordinary people. It behoves us, therefore, to tread carefully.
By their failure to index the tax threshold the Government are behaving in the worst possible way to increase poverty. They are putting the burden of a fiscal adjustment almost exclusively on the shoulders of the poor and those who are near to poverty. If a hard choice of this kind had to be made, it would have been better to increase the standard rate of income tax than to fail to index the threshold.
I agree with the hon. Member for Colne Valley (Mr. Wainwright) that, given the Government's public sector borrowing requirement, it will not be necessary to compensate for all this tax loss if we do not go down the avenue that the Government have chosen.
I quote from the Financial Times leader of 11 March:
The decision to override Rooker-Wise in order to avoid a rise in nominal tax rates is deplorable. It is regressive, and therefore widens the poverty trap; it means that those who have made realistic pay settlements do not get the advantage an honest change might have offered of some tax relief".
As the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) said, there is a point about honesty in taxation that the Financial Secretary should consider. I understand that his defence against past failures to index taxation in the way implied by the Rooker-Wise amendment in 1977 is that there is no expectation that indexation will be full and complete in every year. The burden of the amendment was honesty in taxation, that a Government should be compelled to show the extent to which inflation had increased the tax burden on ordinary people.
It is abundantly plain that in this clause the Government have chosen the dishonest course. It would have been far more honourable for them to continue to increase the nominal rate of taxation. If the Government are to have any chance of winning the next general election they must show that they have reduced the nominal rate of taxation. That is their strategy. Nevertheless, there has been a real increase in the total tax burden since the Government took office, contrary to all the pledges given at the general election.
As we know from the Financial Secretary and from answers to questions since the Budget, the tax burden has been considerably increased since the Government came to power. The Government's calculations given in a reply in March suggest that the tax burden as a percentage of gross domestic product at market prices has increased from 35 per cent. in 1978–1979 to 40 per cent., in the current financial year. That estimate is lower than many others that have been made. Many hon. Members will have seen The Times' estimate which suggests that 47 per cent. to 48 per cent. is the real tax burden as a percentage of GDP. Others have made calculations between those two figures. I do not complain of that. There are different ways of making the calculations, but there is no doubt that there has been a substantial increase in the real burden of taxation, and the Government are compelled to admit that.
Mr. Walter Eltis, who is not particularly pro-Opposition, said in an article that, looked at in another way, the tax burden has increased by one-eighth, or 12 per cent., in relation to the national income. As he said, for a Labour Government that would be amazing but for a Conservative Government it is staggering.
The effect of the increase in the burden of taxation is threefold. All workers earning less than two and a half times the average wage are now paying proportionately more tax than they were before the 1979 Budget. Secondly, the level of earnings at which the low paid start to pay tax is lower and the rate at which they pay is higher than in 1979. Thirdly, the number of families with children in the poverty trap has increased by 40 per cent., and the "why work?" syndrome has considerably worsened. Those are the effects of this Budget and its predecessor on the poor over the past two years and they add up to a considerable increase in real poverty.
The effects are not confined to the low paid. Those on average earnings have also suffered an enormous increase in the real tax burden. The Times calculated in an article last week that those on average earnings have had a 9 per cent. increase in the tax burden compared with three years ago. Monetarists will argue that that is not significant; that that sort of pressure for increased wages resulting from increased taxation will not necessarily be translated into increased prices. They argue that inflation is a matter of the supply of money and nothing else. I do not agree.
Apart from the enormous increase in the tax burden, the consequence will be increased resentment on the part of ordinary workers of the extra burdens they have to carry and of the reduction in their living standards which have been brought about. Pressure will be generated for higher wage demands in the forseeable future. This can lead to one of two results. It can lead to higher inflation. The Government, who have been boasting about the decreasing rate of inflation, will find during the next 12 months in the next pay round that the rate will stabilise and perhaps go up by this time next year. Alternatively there will be an even greater increase in the unemployment level to batter


down the workers to prevent their putting in wage claims to compensate for tax increases. Either way, the Government are building up trouble for the future on inflation or on unemployment as a result of the enormous tax burden that is being loaded on to the ordinary worker, let alone those who are on a lower than average income.
This points to the central failure of the Governments strategy. At no time have they got their broad economic strategy in line with taxation strategy. That was a mistake made by the last Conservative Chancellor of the Exchequer, Lord Barber. He made many mistakes, from some of which the Government have learned, but they have learned nothing from this mistake. His approach on taxation was totally at variance with his approach to the general macro-economic problems, and it is the same with this Government.
This debate has shown the Government's callousness in loading so much on the low paid and the average paid worker and also their strange indifference to a logical and coherent economic policy which fits together to give the country some hope of progress. The Social Democratic Party will support the amendment.

Mr. Dennis Skinner: This debate is on what is known colloquially as Rooker-Wise; at one time it used to be Rooker-Wise-Lawson. At least it was claimed to be so, but it seems that the man in question backed off. I think that the popular name for him among the Tory wets is Niglet. It is rather appropriate. I was about to say that I felt sorry for the Financial Secretary, but I do not; I cannot feel sorry for any of the Tories. He has had a double blow. Not only has he seen the right hon. and learned Member for Cleveland and Whitby (Mr. Brittan) jump right over his back and get a plush job in the Cabinet, but he has had to suffer the indignity of watching the amendment which he, with my hon. Friends, supported a few years ago being thrown into the dustbin. I assume that he was consulted about it. We cannot be sure because from what we gather the Prime Minister does most of these things almost on her own. I am sure that the Minister will have an adequate explanation why the right hon. Gentleman has been dealt with in this severe fashion.
In order to get things straight with my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who leads on these matters from the Opposition Front Bench, I should like to put it on record that I suspect that the NEC is not to blame for what I was about to call this aberration in the Government's Budget policy. However, that is not correct because it was predetermined. The NEC is not to blame for the decision not to apply the Rooker-Wise formula which would have meant about £2 billion if we take into account all the areas that are affected. It should be made clear that the national executive committee of the Labour Party is free from blame on this matter and that no member of the Parliamentary Labour Party will be tramping up and down the country explaining to audiences that the Left-wing-dominated NEC has caused the Government to drop this measure.
Unlike some other hon. Members on these Benches, I am not surprised that the proposal to keep in line with Rooker-Wise was dropped by the Tories. When one examines their taxation policy from the time they were elected just over two years ago, one sees that it has been a policy of handing out tax relief to, by and large, the

wealthy wherever possible. There were many examples, especially in the first two Budgets, through which over £1,000 million was given to the better-off.
Recent examples show that only those who are getting four or five times the average wage benefit from the overall Tory tax policies. As has been mentioned in the House on two or three occasions, a newspaper article last week, not in Tribune or some Marxist periodical but in The Times, points out that people were conned two years ago when they were told that there would be tax cuts. Most of the electorate assumed that they would benefit as a result. Now we are seeing massive increases in taxation—about 20 per cent. for the average person. That is a terrible indictment of the Tory Government's attitude towards the electorate whom they kidded in a most dishonest way.
4.45 pm
Let us consider nurses, for example. About two years ago the Prime Minister stood on the door step of No. 10 Downing Street and talked about compassion. No doubt she had in mind the image of a nurse. Yet now not only are the Government hammering nurses with a possible 6 per cent. pay policy, but it is also nurses who will be hammered by the proposal in the Budget in regard to Rooker-Wise which ensured that fiscal drag was taken into account. I learnt that phrase from Roy Jenkins when he sat on these Benches. He used to regale us with stories about fiscal drag, the mirrored J-curve and all the other wonderful things. I wonder what he is doing now with the £90,000 that he has picked up out of the Common Market and the £10,000-odd that he is getting as a result of Morgan Grenfell selling off British Aerospace shares. He does not have to worry about fiscal drag. He is one of the people who have benefited from the Tories' taxation policies of the last two years, and no doubt he will benefit again through not being worse off as a result of this Budget.
It will be the nurses and people like that who will suffer. They will have a 6 per cent. pay policy and no free collective bargaining. They will suffer a loss through taxation of £5 or £6, or even £10, a week. It is different for people like Lord Vestey. The Government say they have tightened that loophole, but let us compare the two examples—the nurse with £40 take-home pay who will suffer as a result of the Budget, and people like Lord Vestey and others in the black economy. The ex-chairman of the Inland Revenue, Sir William Pile, talked about the black economy amounting to £8,000 million a year ago, yet here we are talking about taking away from the ordinary taxpayers £2¼ billion. That is what the Tory Government are up to in this proposal. That is why we on this side of the House, united on this occasion with all sorts of odds and sods, Liberals, sprats and everybody thrown in, are trying to get this reversed.
It is worth while noting at this stage that it is necessary to get that money into the economy in order to bring down unemployment. It is no use the Prime Minister and the rest of the Tory Front Bench talking about getting unemployment down, while refusing to put extra demand into the economy. Increasing demand does not mean increasing taxation, but rather decreasing the total taxation demand. Without increasing demand there is not a chance in hell of reducing the dole queue of 2½ million. It is no use assuming that we can wait for some magic cure, as suggested by Tory spokesmen from time to time. The old idea that somehow we are on course is nothing more than a cosmetic for the county council elections. The idea that


the recession is bottoming out and that there is something better round the corner is nonsense. It cannot be achieved unless extra demand is put into the economy. That is why it is necessary to have the extra £2¼ billion.
When people ask Labour Members "What is your alternative strategy?", it is no use our just saying that we are against unemployment. We have to be able to express ideas and policies for reducing unemployment. It is no use our leaders wringing their hands and complaining. We have to be able to spell out to people how we would reduce unemployment. There are many ways of doing it, including a reduction in the working week and having longer holidays, but we must pump more money into the economy. That is the whole essence of our argument about economic strategy. It cannot be achieved by increasing taxation.
When Tory spokesmen suggest that a Labour Government would increase taxation, they are talking nonsense. If we were to do that the effect would be to put even more people out of work. We want to make it clear that putting £2¼ billion back into the economy is the very essence of our policy for reducing the dole queues. In fact, it will require a good deal more than that. This is only one element of it. We should not accept any lectures from Tory Members on this question.
The other day I was reading a financial article in The Daily Telegraph. I am not sure that the fellow who wrote the article is an avid reader of The Daily Telegraph, but he had been given a page in which to express his ideas. As we all know, The Daily Telegraph is one of the official organs of the Tory party, together with several other newspapers. The Daily Mail looks after the semier side and the The Sun looks after the so-called working-class side. The Daily Telegraph speaks to Conservative chairmen up and down the country.
The article referred to the well-known phrase that is used by Tory spokesmen, including the Prime Minister, about spending more than we are earning, and said that it is a complete lie; that it is the opposite of the truth. The article explained that in the personal sector we are spending £15,000 million less than we are earning, and it is nonsense to suggest otherwise. Yet that is what the Prime Minister does from the Dispatch Box, and she is supported by all the Tory pundits from the Tory BBC and the Tory ITV. It is nonsense to tell nurses and all the others who are fighting to stay above the poverty line—including most of the civil servants, but not all of them—that we are spending more than we are earning as a nation. The truth is that more money needs to be put into the economy to get it moving again. None of the promises that the Tory Government have made about reducing unemployment can come to fruition unless that is done.
The Government are hoping, naturally, as they have hoped throughout their whole two-year period of office, that somehow or other, by making firms leaner, by creating 7,000 bankruptcies, and so on, a new dynamic will suddenly emerge and there will be an upsurge from below which will result in a large number of jobs being produced at a much lower cost than hitherto. But it is not happening, and it cannot happen, because we do not live in a purely market-force economy.
The Tory theory about allowing things to run down so that a point will be reached at which they will start to build up again is correct in theory if there is a simple, ordinary,

market-force economy, but most of our economy is managed. Some of us might not want that to be the case. Certainly some Tories do not like it. The Prime Minister actually believes that the economy is not managed. That is clear from all her outpourings. But the greater part of the economy is managed from year to year, and most of it can be forecast.
Let us assume that the public sector were to be run down, by, say, 20 per cent. in the course of the next 12 months. That could be planned by a Tory Government. It could not be done by market forces. The Government would have to take certain conscious decisions in order to run it down.

The First Deputy Chairman: Order. The hon Gentleman should keep subsection (1) of clause 23 clearly in mind and relate his arguments to it.

Mr. Skinner: The point that I am trying to make is quite simple. The Government suggest that they are worried about unemployment and want to reduce it. I am explaining that the amendment would put about £2¼ billion back into the economy and that that would help to reduce unemployment. I am also suggesting that the Tory Government are wrong in their assessment of the economy, as contained in the Budget. I am suggesting that they are wrong in believing that by allowing things to drift they will achieve their objective of reducing unemployment. That is all part of the argument in favour of the amendment, and one aspect cannot be divorced from another.
When Tory spokesmen argue that they want to reduce unemployment, I do not believe them. I believe that their strategy is to throw more and more people out of work, in order to have 60 or 70 young people or adults fighting for one job and having to run to the employment exchange the moment they hear of a job. That is the policy of the Tory Government. There is no question about it, but Tory spokesmen tell the people outside—this is true of their spokesmen in the county council election campaign—that the Government are really endeavouring to reduce the dole queues. That claim is nonsense.
We need to put more money into the economy in order to reduce unemployment. That policy alone will not reduce unemployment, but the one thing that is certain is that we cannot leave things to strict market forces. Indeed, the Secretary of State for Industry—tortured as he is—has on three occasions in recent months had to come to the Dispatch Box and make statements about managing the economy. We are told that he has been crying his eyes out in the Cabinet. He has told his Cabinet colleagues that he has to put more money into the economy or else the position will get worse. That is the opposite of what the Tory Government are seeking to do in the Budget.
The Financial Secretary to the Treasury has had a rough time over the last two or three months, having been upstaged by his right hon. and learned Friend the Chief Secretary to the Treasury. There is an important point to be made here in parliamentary terms. We seem never to see the Chief Secretary sitting on the Treasury Bench at the same time as the Financial Secretary. It is a strange state of affairs. When the Chancellor of the Exchequer was answering questions last Thursday, the Financial Secretary was not present.

The First Deputy Chairman: Order. That cannot be part of the debate on the amendment to clause 23.

Mr. Skinner: No, but it is surely fair to ask why the Chief Secretary is not sitting on the Treasury Bench today in order to listen to the arguments and to give support to his colleague the Financial Secretary when he answers the debate.

The First Deputy Chairman: Order. Any argument that is relevant is in order, but so far I am not persuaded that the hon. Gentleman is in order.

Mr. Skinner: My hon. Friend——

The Financial Secretary to the Treasury (Mr. Nigel Lawson): May I assist the hon. Gentleman? My right hon. and learned Friend the Chief Secretary is at the moment giving evidence before a Select Committee.

Mr. Skinner: The point that I was trying to make is that it has happened on so many occasions that it cannot be a coincidence. On the last occasion that the Chancellor of the Exchequer was answering questions, the Financial Secretary was missing, but the Chief Secretary——

The First Deputy Chairman: Order. On the last occasion the debate could not have been on this amendment.

Mr. Skinner: The Select Committee was not sitting at the time, so I am not sure what was happening on that occasion. What is certain is that the amendment has been tabled by my hon. Friends in order to stop the Chief Secretary from carrying out his policy over the back of the Financial Secretary. That is another reason why the Chief Secretary should be in the Chamber to defend his policy. Why should the Fiancial Secretary have to do it? Perhaps he has to back the policy if he does not want to lose his job. His job is more important than anything else. However, the architect of this policy should be here.
I keep reading about the brilliant fellow who has been put in the Cabinet. I know that that is not true, and so do some Conservative Members. However, we are continually told that he is a brilliant lawyer, with a wonderfully incisive mind. The right hon. and learned Gentleman should be in the Chamber to tell us and his Tory colleagues the reason for introducing this policy.

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The First Deputy Chaiman: Order. I have spoken to the hon. Gentleman four times. I must ask him to come to the point.

Mr. Skinner: The point is simple. The Budget strategy is one of cutting back. In order to achieve that, the Government decided not to improve personal allowances in line with the Rooker-Wise-Lawson amendment of two or three years ago. The strategy is to get rid of that money. The Chief Secretary was given that job. Therefore he shoud be here, instead of the Financial Secretary. The Financial Secretary did not get promoted in the reshuffle. The Chief Secretary got promoted over his back. Why should the right hon. Gentleman——

The First Deputy Chairman: Order. The Chief Secretary is not here. I can do nothing to get him here. I am trying to ask the hon. Gentleman to return to the subject of the amendment.

Mr. Skinner: My remarks are in line with the amendment. The amendment involves the demand in the economy and the amount of taxation that is being imposed on most people. That does not matter much to Members

of Parliament. They are well paid. I am thinking about all the pensioners who will face massive tax increases as a result of this proposal. My remarks should go out loud and clear during the county council elections. I am making a proper political point. I know that it will not be printed, but it is right to point out that in the week of the county council elections the Tories will prevent us from putting £2·25 billion back into the economy and into the pockets of nurses, dustmen, miners, old age pensioners and millions of others who are on or near the poverty line. I am thinking about voters in the marginal areas in Nottinghamshire—where we might succeed—the GLC area and particularly Derbyshire. Those electors should understand that that is what the Tory Government: will do.
I understand that there will be a Tory party political broadcast tonight. It will last for five minutes. One thing is certain, the Tories will not say that, "Dear electors, we should like to confess today. We should like to tell you that we have hustled all our troops through the Lobby in order to stop £2·25 billion going back to you, as it should have done in accordance with the law." I am asking not for something extra, but that the Government should keep personal allowances in line with the rate of inflation. What is wrong with that? The Tories will not say anything about that in the broadcast. They will give people a lot of flannel about the Labour Party, but they will not tell them that they have betrayed all those whom they told in the general election that they would——

The First Deputy Chairman: Order. Once again, may I ask the hon. Gentleman to deal with the amendment? It will not be involved in any broadcast that may occur subsequent to the debate.

Mr. Skinner: [Interruption.] I am being assisted by some of my hon. Friends on the Front Bench. That is not usual. They suggest that everything that I am saying is in order. I shall not name names. The Government have got rid of the Rooker-Wise amendment, by their central financial policy—the Budget. That amendment allowed personal allowances to increase in line with inflation, but it has been discarded. In the middle of county council election week, I have every right to tell electors—if those bods in the Press Gallery want to use it—that they are being conned. No doubt the speaker in the broadcast will weep crocodile tears about unemployment. No doubt the Tories will say that they will do everything right, that it is a long haul and that they will put their house in order if they are given five years.
This is a political argument, and not just a tinpot parliamentary one. It should go out loud and clear. It is an argument about the redistribution of wealth. It might not bother you, Mr. Godman Irvine, and it does not necessarily bother me. Nevertheless, it bothers all the impoverished groups in our society. I am appealing to them. It is true that there are no such groups in the Chamber. I have not come here to convince some of this lot. I do not expect this lot to change the way in which they vote. On a different issue I would not expect any Labour hon. Member to change the way in which he voted.
I am attacking the Tory Government's policy, on which you, Mr. Godman Irvine, and the rest of them went to the country in 1979. The public were kidded. That is what you did, Mr. Godman Irvine. You told them that the Tories would bring down taxation. Along with the Daily Mail and the other Tory papers—there was a front page about 12


lies—Conservative Members kidded the public. I am talking about one of those lies. At the time we challenged the Tory Party and all its members about taxation. We asked how they would finance the amount of money needed to pay decent pensions to 10 million old-age pensioners. We asked how they would finance the disability allowances that are paid to about 1 million disabled people. We asked how they would finance hospitals and the social services. In the 1979 general election those were the central arguments, yet only two years later the Tory Government have refused to increase personal allowances in line with inflation. I refuse to be shut up on this issue, because it is important.
In county council election week, the amendment seeks to show that on 5 May—prior to the Tories' broadcast—a sinister operation is taking place in the House of Commons. The Tories will not say anything about taking away £2·25 billion. That is what I am trying to say. I have every right to say it. You will listen, Mr. Godman Irvine, to a lot more twaddle before you have done. I do not suppose for a minute that other hon. Members will be pulled up and told that they are out of order—[HON. MEMBERS: "Withdraw".] It is essential to this issue——

The First Deputy Chairman: Order. The Chair is entirely impartial. The hon. Gentleman and I have worked together for some years, and he knows that.

Mr. Skinner: That is the theory——

The First Deputy Chairman: Order. The hon. Gentleman has said that to me personally.

Mr. Skinner: As far as I am concerned—[HON. MEMBERS: "Withdraw".] I shall not withdraw anything. Every prospective Tory candidate in the 1979 election went round the country boasting that a Tory Government would finance the social services and everything else. They said that there would not be any cuts and that they would keep personal allowances in line with inflation. The Financial Secretary bragged more than any other hon. Member, because together with several of my hon. Friends he was a member of the Committee on the Finance Bill and was partly responsible for the amendment. Why should I withdraw? I am talking about a policy that was supported by every Tory Member. No doubt some of them are talking about it in the county council elections. The truth should be told.
A couple of years ago the Prime Minister spoke from the steps of No. 10 about compassion. She is taking money from pensioners, nurses and these other groups. Why should I shut up and why should I withdraw?
The Tories have argued that this is all about the public sector borrowing requirement. They need to speak about that. How much did they get it wrong? The figure was about £5,000 million in one financial year. They got it wrong by about 60 per cent.

Mr. Jack Straw: The figure was about 40 per cent.

Mr. Skinner: That was the size of the mistake in one year. Now they chide us for suggesting that we are wrong to ask for £2¼ billion to be put back into people's pockets. We are not putting it back in an abstract way. Our amendment suggests that the money should be returned to those to whom it belongs. It will affect everyone, but not

to the same extent those in the higher income groups. We are concerned mostly about those who are worrying about how they will pay the rates in the next 12 months and how they will pay the water rates as a result of the cuts in the Government's subsidies. They would have a better chance of paying their rates and the rents which have been increased by the Government, if they were able to get their hands on the money that was taken from them in the Budget.
One of the most highly rated authorities involved in the GLC elections is the Royal borough of Kensington and Chelsea—Tory-controlled as it has always been. That council has the second highest rate in London. I do not want any lectures about that. The reason why the rates have increased in the inner cities and in Tory-controlled councils is that the Government have cut the rate support grant.
The lower paid could pay their rates if they had the money, which they would have if the Government were to accede to our amendment, but they will not. The £2¼ billion could be used to purchase some of the goods needed. The Government talk about reducing unemployment, but it cannot be done by whistling in the dark. It has to be planned. There is no way in which a multi-national company will decide to do something for Britain this year. It will not say, "We will improve our investment in certain parts of Britain". One thing is certain. The £2¼ billion will not do it on its own, but it will be a start if it increases the amount of money that can be spent. Most of the people who would benefit—though not all—from the £2¼ billion back in their pockets would spend it, because they are living on the breadline. By their spending it, some of that money would help to provide jobs for British workers. That is why it is essential—apart from the moral reason—to ensure that the Rooker-Wise proposals are kept in line.
We do not want lectures about the public sector borrowing. It increased last time by £5 billion. We have tabled the amendment in order to reduce the dole queues and play the game by these people so that the Tory Party—not that it matters to me—can be shown to have honoured its promises. Had it wanted to do so it would not have included this proposal in the Budget. The Opposition will vote in the Lobby in accordance with the policy that we put before the people in 1979. Although there were arguments in the Finance Committee when this was first introduced, by the time the manifesto was drawn up we had committed the next Labour Government to uprate the personal allowances in accordance with inflation. That is what we promised the electorate. The Tory Government have ratted on their promises, so tonight we shall be voting to honour our promise.

Mr. K. J. Woolmer: I shall join my colleagues in the Lobby to vote for the amendment, which is basically to ensure that people's income taxes do not increase simply because prices rise with increasing inflation.
I shall be voting with my right hon. and hon. Friends for a number of reasons, overwhelmingly because those on average or below average earnings have been badly hit by the Government despite the promises, to which my hon. Friend the Member for Bolsover (Mr. Skinner) referred, made before the election to cut taxes, especially income tax. Those on average, below average or a little above


average earnings have been badly hit by the Government in three ways—first, by the abolition of the lower, reduced tax rate band in the 1980 Budget. Last year, at a stroke, the Government increased the marginal tax rate for the lower paid workers—the pence the taxpayer pays on the extra pound he earns—from 25p to 30p in the pound. Last year, too, Opposition Members drew to the attention of the public the fact that that was at odds with the Government's arguments before the last election to the effect that workers should be given an incentive to work. We had the picture of the lower paid worker being given an incentive to work—the good old Tory incentive that one must work harder because one will be paid less and if one wants to earn more one must work harder. That is a different scene and story from that before the election.
The second way the wage earner has been hit, again this year, is through the increase in the national insurance contributions, which have increased by a little over 1 per cent. of incomes. I am amazed when I hear Ministers protesting that national insurance contributions are not a tax or a deduction from a wage packet. Ministers know as well as anyone that for wage and salary earners national insurance contributions are a form of income tax. It is a stoppage out of the wage packet—yet another stoppage from wage packets in the past few weeks.
On top of the increase in marginal rates of tax and the increase in national insurance contributions, the failure to raise personal allowances is the third and final attack upon the average wage earner and those on lower pay. It is worth reminding the electorate that, as a result, 1¼ million low-paid workers will be drawn into the tax net by the Government who won the election on the fraudulent suggestion that they would cut direct taxes. We know what the truth is now. Our people pay more tax and not less.
I illustrate my argument by a few figures. If one compares average, below average and slightly above average earnings, some interesting figures emerge. For example, a married man, on two-thirds average earnings, with a couple of children, is about £2 a week better off, including child benefit. He is about 3½ per cent. better off as a result of the various changes since 1978–79. Someone on average earnings is about £3·40 better off, or about 4½ per cent. Someone on five times average earnings—earning over £600 a week—even after the Budget is £38 a week better off, or 16 per cent.
How can the Government justify tax policies that have resulted in a textile worker in my constituency being only £2 a week better off—indeed, as textile workers have had low wage increases, if any, recently, he is probably not even £2 a week better off—when someone earning £600 or £700 a week is £38 a week better off? That £38 is as much as many married women working in the textile industry take home each week.
I was appalled to hear the Chief Secretary to the Treasury say on Second Reading:
Leaving personal allowances at the same level as last year is bound to increase the number of taxpayers. It will be unwelcome to taxpayers at all levels, especially those with small incomes.
The Chief Secretary can say that again. He tried to justify the Government's action by saying:
the largest cuts in real income will fall, perfectly reasonably, on those with very high incomes."—[Official Report, 13 April 1981; Vol. 3. c. 41.]
That is a travesty of the total effect of the Government's policies. The Chief Secretary was trying to bamboozle people. Does the Financial Secretary to the Treasury wish to intervene to deny that the Government's policies have

resulted in a 16 per cent. increase in real incomes to those earning five times the national average and a. measly 2 per cent. or 3 per cent. increase for those on two-thirds of average earnings? He cannot deny it.
This is not the time to discuss indirect taxation, but it is worth remembering that families have been clobbered by indirect tax as well as by the failure to raise personal allowances. That failure would not have been so bad if the Government had been making concerted efforts to hold down prices and indirect taxes, but not only are people suffering higher income tax, they are paying higher indirect taxes. For example, VAT was doubled and the taxes on beer and cigarettes have been increased. A person on average earnings pays nearly £20 a week or more to the tax man for the things he buys—an increase of nearly 17 per cent. in real terms.
As the representative of a constituency in West Yorkshire I know that the industrial workers there are suffering under the Government. They earn less than the national average. Earnings in the textile industry are 15 per cent. below those in manufacturing, and wages are even lower in the woollen industry, where the average male worker takes home £20 a week less than the national average. A worker in the clothing industry takes home £30 below the national average. Those are not fiddling sums, but are substantially below national average earnings and the workers concerned are being hit particularly hard by the Government, who are picking not on those earning £600 a week but on those earnings £50 to £70 a week and women earning £35 to £45 a week.
In West Yorkshire average earnings are about £15 a week below the national average and the industrial workers of Yorkshire are being hit by the Government's tax policies. They are also being hit hardest by price increases. Charges for gas and electricity have increased and council and private rents are going up. Private landlords know that they are on to a good thing because the general level of so-called fair rents is rising rapidly as council rents are increasing. Rent officer after rent officer is sanctioning private rent increases of hundreds of per cent. Private landlords in West Yorkshire cannot shove rents up far enough or fast enough. It is an outrage.

Mr. Straw: Does my hon. Friend agree that another reason why private landlords are on the rampage is that the waiting lists for council housing are growing and there is an increasing shortage of council housing because of the cuts in council house building and the sales of better council houses? Private tenants have nowhere else to go and have to put up with rent increases, even those above what rent officers allow.

Mr. Woolmer: I am grateful to my hon. Friend. He is correct. Those being hit by increased rents are the young, who have no choice, and the elderly, who may have lived in a house for 50 or 60 years and have known no other home.
Rents are being increased on properties that are over 100 years old and were paid for a long time ago. While canvassing for the local elections I have been asked by many private tenants why the Government do not pass an Act to allow them to buy their houses. The Government are apparently keen to give people the right to buy, so why do they not let private tenants buy the houses in which they live? Many of those tenants have paid for their houses many times over and they are being hit hard by the


increases in gas and electricity prices, the rent rises, the doubling of VAT, the increased taxes on beer and cigarettes and the failure to uprate personal income tax allowances.
Pensioners are also being hit by the Government's tax policies. Women between 60 and 64 and those over 65 with small occupational pensions are being caught for income tax for the first time and they do not know what has hit them. They are receiving tax codes almost every other month. The codes are being scattered about like confetti and those pensioners are paying a marginal rate of tax of 40 per cent. or 50 per cent. It does not make sense.
I hope that Conservative Members will hang their heads in shame when they realise what is happening. I remember the claptrap that some Conservative candidates poured out during the election campaign about their concern for the elderly.

Mr. J. W. Rooker: It may be unfair for my hon. Friend to castigate all Conservative Members. An article on the front page of Help the Aged's magazine "Yours" outlines the injustice done to women between 60 and 64. Listed among the hon. Members who have campaigned on behalf of those women is the hon. Member for Wellingborough (Mr. Fry). Will the hon. Gentleman be in the Lobby with the Opposition tonight?

Mr. Robin F. Cook: Will he be in the Chamber today?

Mr. Woolmer: I am grateful to my hon. Friend. Unfortunately, the hon. Member to whom he refers is not present in the Chamber. In fairness, the hon. Gentleman may not have been aware that reference was to be made to him. It shows, however, that if one makes promises to fight for something, one should be seen to be fighting for it. There is still considerable time left for debate. I am sure that the hon. Gentleman will be told by his hon. Friends that reference has been made to him. We hope to see him in the Chamber speaking on this matter and voting against the Government.
The failure to uprate benefits has meant a further sharp increase in the poverty trap. I recall, as do many hon. Members and members of the public, how the Conservative press, Conservative Members, and the Prime Minister shed enormous crocodile tears about the high rate of income tax and the number of those caught in the poverty trap. When the Government came to office, the poverty trap, in terms of today's prices, covered the income range from £44 a week to £74 a week, including family income supplement. The Government came into office pledged to take action. However, those now caught in the poverty trap cover the income range from £42 to £82 a week.
A family man with two children who has an increase in earnings from £42 to £82 a week will not finish up £40 better off but £1·23 worse off. That is a staggering situation. It is totally at odds with the Government's election pledge to increase incentives and to reduce the burdens on those who can least afford it.
Instead of improving, the position has worsened. Those affected are typically employed in the textile industries of West Yorkshire. The poverty trap has been made even

deeper. The situation must be compared with the capital transfer tax concessions that hon. Members have yet to debate. The Government seek to give enormous benefits to those with the largest fortunes. I was listening to a BBC financial programme while driving around my constituency on Saturday morning. The programme defined small savers as those with less than £75,000 in savings. I would like to know how many industrial workers and their families have savings of £75,000. Yet these are described as small savings. Goodness knows what wealth is possessed by the big boys whom the Government seek to help.
At the same time, the Government hound people receiving social security payments with questions about sexual intercourse. There should be no mistake. People receiving small incomes have been hounded in the last few months. When one compares the enormous increase of £38 for a person earning £600 a week with the miserly increase for those on below average earnings, one sees the reality of the subsection that we seek to delete.
The truth is that there are huge tax cuts for the richest through income tax, the benefits that arise from the change in the balance of indirect taxes and the concessions on capital transfer tax. Those have to be compared with higher gas and electricity charges, increased rents, higher VAT and now the higher income tax payments. I hope that the Opposition can persuade sufficient Government Back Benchers to hang their heads in shame and to vote to restore the rightful personal allowances of taxpayers.

Mr. William Hamilton: Since the last election, the Government, and especially the Prime Minister, have emphasised that this is to be a period of honest and open Government. Yet the Budget can only be described as a massive deception of the electorate. I refer to the proposal that we are now debating. At a stroke and without undue publicity, the Government took, or stated their intention of taking, thousands of millions of pounds out of the pockets of people who, generally speaking, were among the poorest people of this country. At the same time, the Government created the impression that they were not increasing direct taxation. By sleight of hand, the Government did what they had stated they would not do. That is our complaint.
The indexing of personal allowances to protect them from inflation was first proposed by the present Financial Secretary to the Treasury. The amendment described by many people as the Wise-Rooker amendment was, in fact, the Lawson amendment. It was the right hon. Gentleman's idea originally at the time of the Labour Government that these personal allowances should be protected from inflation by indexing. My hon. Friends took the right hon. Gentleman at his word. That is how this matter became law.
The Government now seek to delete, at a stroke, that provision with consequent great hardship to those who can least bear such hardship. The right hon. Gentleman knows that very well. He cannot deny it. The figures have been produced not only by the Labour Party but by those disinterested and objective bodies that are part of the poverty lobby.
When the Budget proposals were produced there was a massive reaction on the Conservative Benches to the 20p increase in the price of a gallon of petrol. This was to be the start of the rebellion in the Tory Party. It is the issue that still reverberates throughout the shires. The


Government have not yielded on the 20p petrol increase. In the period between the announcement of the Budget proposals and the debate in Committee last week, there was much press speculation about the number of Tory rebels on the issue. Hardly a mention was made of the personal allowances. Those allowances amount to thousands of millions of pounds while less than £100 million was involved in the amendment conceded last week reducing the duty on derv.
The Chancellor of the Exchequer argued that he could not afford to reduce the duty on petrol by 5p or 10p because substantial sums would be involved. Those sums are small change compared to what will be taken out of the pockets of the lower paid. My hon. Friend the Member for Batley and Morley (Mr. Woolmer) gave examples of textile workers, and in a moment I shall give an example from the Civil Service. I do so because the Government sought to paint a picture of civil servants in bowler hats and brollies, on £20,000 a year. The truth is almost the reverse. However, I shall come to that in a moment.
In the debate last week on the 20p increase on petrol there was immense competition among Tory Members. All the rural Tory Members wanted to say their piece about how wicked the 20p increase was, and yet almost all of them—with the exception of about a dozen—changed their minds when it came to the vote. In other words, their vote did not follow their voice. They made loud and rude noises about the Government's imposition of 20p per gallon, but then supported it in the Lobby. When they return to their constituencies and say "I spoke against it", their constituents should reply "We are not interested in how you spoke, but in how you voted". That, after all, is how we are judged in the House.
It is interesting to compare the enormous competition among hon. Members seeking to catch the Chairman's eye on that occasion with what has happened today. Not one Conservative Member has sought to speak in this debate on personal allowances, although Conservative Members must have among their constituents those agricultural workers whom they presumed to protect last week and who will be hit hard by the Government reneging on the indexing of personal allowances.
It is well known that most agricultural workers earn below average earnings. In fact, almost without exception, they earn below the average earnings of £120 a week, or thereabouts. As my hon. Friend the Member for Batley and Morley reminded us, those workers and their families are hit hard not only by this proposal, but by the indirect taxes on cigarettes, and even on the matches to light them. On every test, people on low incomes will be hard hit, particularly by this form of increased direct taxation.
The Chancellor said, in answer to a question earlier this week, that his Government were pledged not to increase direct taxation. He really believed what he was saying, but this is the most massive increase in direct taxation that there has been for a considerable time. Moreover, it is taxation on the low-paid. My hon. Friend mentioned widows between 60 and 64 years of age and the lower-paid workers on less than average earnings who will all be dragged into the income tax net, in which they were not caught before the Budget.
My hon. Friend the Member for Bolsover (Mr. Skinner) spoke about nurses. I too want to mention them, but first, I want to underline what he said. Many of the workers who will be paying income tax for the first time have what the Minister might call "real jobs" producing real wealth on

which are based our National Health Service, social security, housing and all the things that add to the quality of life. They are producing the goods and the wealth on which the Prime Minister rightly lays such importance.
While our nurses do not produce goods, they produce one of the best services enjoyed in this country. Theirs is one of the most respected sections of the community, yet the Government are asking nurses, like the civil servants, to accept a 6 per cent. increase in their wages. Some of that will be deducted for lodging and allowances, if they are living in. Many nurses will be clobbered by the de-indexing of the personal allowances that we are now debating.
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Let not Government spokesmen use weasel words of gratitude to nurses when they know that their words conflict with their actions. The Government are taking money from the most respected and popular section of the community not only in direct taxes but in indirect taxes. It is nonsense for this Government to talk about incentives to work, because these workers are being given massive disincentives to increase their wages because of the poverty trap. If they earn an extra pound, they lose more than the pound in benefits in other directions.
We object to this kind of immorality and inequity. Even if the sums were trifling, it is an insult to the sense of fair play of ordinary people. One need only compare the fellow taking home less than £50 or £100 a week, and how he is treated in direct and indirect taxation, with the fellow who is earning £20,000 a year or more. He is laughing all the way to the bank, while the other fellow is laughing all the way to the dole queue. I find the situation quite indefensible.
In the same context, I quote an example from today's Glasgow Herald. That paper is what I suppose Scots would call a quality paper.

Mr. Cook: Well.

Mr. Hamilton: I thought that that remark would draw a comment from the hon. Member for Edinburgh, Central (Mr. Cook). I said that some people would describe the Glasgow Herald—it is all comparative, is it not?—as a quality, non-party paper, which means a Tory paper in Scotland.
The article is headed:
The civil servants who live below the bread line".
It describes an exact case, but I shall not mention the person's name or address, except to say that his christian name is Raymond and that he is aged 18. He is
one of 232,366 civil servants, one third of the entire service, living below the poverty line".
He says:
I have to save hard for a new pair of shoes".
That is no wonder, because he has a wife and a baby daughter and they live in one room of his father-in-law's flat. He takes home £45·29 a week.
The article says:
Two thirds of the service"—
that is, of the whole Civil Service—
earn less than the national average wage, calculated as £124·50 a week or £6,474 for males over the age of 21".
When I quote those figures in my constituency, I get a rude laugh. My constituents ask, what parts of the country have average earnings of £124 a week? Of course, the figures are distorted by the enormously high earnings of people


working on oil rigs in north-east Scotland and elsewhere. In areas such as Fife and Yorkshire, the average is far less than that.

Mr. Robert Taylor: Is the hon. Gentleman suggesting that that young man should be on average earnings? Surely average earnings relate to those people who in many cases have been working for many years up to the age of retirement at 65. Is the hon. Gentleman saying that that 18-year-old youth, married with a child, should be on average earnings?

Mr. Hamilton: I am not saying that at all. That young man would not expect to be on average earnings. I assume that the hon. Gentleman will be voting against the amendment. The Conservative Government are saying that whether he likes it or not that young man shall accept a 6 per cent. increase in his wage this year and that he must do so in the national interest. The Government are imposing that because they take the view that all civil servants are on high incomes. In any case, "the Civil Service" is an emotive phrase which generates hostility among the populace. That is what the Government are acting on. They believe that the Civil Service is unpopular in the country and that therefore it is safe to clobber. By doing so, the Government are clobbering that young man who is struggling to survive with a young family on take-home pay of £45. In fact, he is struggling to the extent that he qualifies for £7 a week family income supplement.
That is all that I am saying. That young man is among the two-thirds of civil servants who earn less than average earnings. That was the figure given by the Government. According to the official figures, two out of every three civil servants are earning less than the average earnings—£124—and will therefore be hit hard by the proposal that we seek to delete from the Bill.

Mr. Robert Taylor: How many of that two-thirds are aged 18?

Mr. Hamilton: That seems to me to be singularly irrelevant. Two-thirds of all civil servants, whatever their age, will be clobbered hard by the Government's proposal. That is why we oppose it. It will hit hardest those who are worse off, because by definition, if someone receives less than average earnings, he is worst off than the rest. These very people are being singled out for clobbering by the Government.
I hope that the Financial Secretary will concede that he was wrong to propose that these allowances should be indexed in the first instance. If he does not, I hope that he will ask the forgiveness of the House. He has been corrupted by office. As a Minister, he is saying something different from what he said when in Opposition. As a result, the poor will suffer to the extent of a couple of thousand million pounds in tax increases which they have never had to endure before. The right hon. Gentleman has something to answer for. I hope that he will be frank with the Committee—although, knowing his record, I suspect that he will not.

Mr. Austin Mitchell: I am grateful to you, Mr. Weatherill, for calling me amid the clamouring throng of Conservative Members who are anxious to absolve their consciences. I presume that the Conservative Benches are

so empty because most Conservative Members are in the Library eating a diet of the words that they spoke on this very matter in 1977.
These amendments deal with what is perhaps the worst part of a bad Budget. Essentially, the clause that we are discussing represents a massive tax rise that has been introduced by the back door. It has been introduced in that way because we understand that that is the method of action that the Prime Minister forced on her minions at the Treasury by refusing to countenance in increase in tax rates. Her view seems to have been that Conservatives should not be seen to be increasing tax rates. Therefore, the Government must do what they have now proposed and increase taxes by the back door. So much for the manliness and virility of Treasury Ministers in standing up to the Prime Minister in Budget discussions.
That may not be true, but, like everything else about this Government, one learns about these things either through leaks or written answers. The leak indicates that this is the Prime Minister's approach to tax increases. The proposal puts her Ministers and many Conservative Back Benchers in the humiliating position of eating all the brave words that they spoke in 1977. I remember those words vividly, because as a young Back Bencher recently elected at a by-election I was persuaded by a smooth-talking Whip that it was an honour to serve as a Government Back Bencher on the Standing Committee dealing with the Finance Bill. I did not realise just how great an honour it was.
I sat through the long discussions on the Rooker-Wise amendments, for which, regrettably, I did not vote on that occasion. I have refreshed my memory today about the words spoken by Ministers and Conservative Back Benchers during those proceedings in Committee. Perhaps the best came from the right hon. Member for Guildford (Mr. Howell), who is now the Secretary of State for Energy. He said of the Rooker-Wise amendment:
The effect is to require the Government each year to be explicit about the real effects of inflation upon taxation and to treat people more fairly than they have been treated in the past … to be more explicit".
He went on to say that the amendment
provides a good start in bringing Governments into better patterns of behaviour"—
which the Conservative Government have now vitiated—
and better habits in relation to taxation and the public discussion of tax policy than they have practised in the recent past. If those amendments were on the statute book, we would stand a better chance of better Government than we have now".—[Official Report, Standing Committee D, 14 June 1977; c. 497.]
Yet we now have what the right hon. Gentleman must regard as a better Government behaving in this fashion and forcing those who supported the Rooker-Wise amendment to eat all their brave words. In fact, the Government have forced them into a position of total humiliation.
The Government's proposal also affects many other aspects of Conservative policy. Section 3 of the Tory Manifesto was rather laughably headed "A more prosperous country". The policies outlined there have given us the "more prosperous country" that we now enjoy as a result of their efforts. It stated:
It is especially important to cut the absurdly high marginal rates of tax both at the bottom and top of the income scale. It must pay a man or woman significantly more to be in, rather than out of, work.
It continued:
Raising tax thresholds will let the low-paid out of the tax net altogether".


That was the promise held out in the Conservative manifesto, but that promise has now been revoked by the decision of the Chancellor and Treasury Ministers not to raise tax allowances. It is that decision to which we are objecting, and it is that decision that we shall vote against.
The Chancellor, when introducing his second Budget, gave what I consider to be the best defence for raising tax allowances in line with inflation. He said:
At first sight that would suggest increases in the personal allowances which fall some way short of the rise in prices during 1979, but this would have a number of undesirable effects.
He added:
It would lower the starting point of income tax in real terms compared with a year ago."—
which he is now doing—
It would increase the number of taxpayers."—
which he is now doing—
It would narrow the gap between the tax thresholds and the main social security benefits,"—
which he is now doing—
and it would impose particularly heavy burdens on those with the smallest incomes."—
which he is now doing. He went on to say:
All those effects would be most undesirable".—[Official Report, 26 March 1980; Vol. 980, c. 1474.]
The right hon. and learned Gentleman is doing exactly that in this Budget by increasing taxation.
This is a long story of adjusting and trimming the figures. For example, the Chancellor might claim to have in hand the additional increase in the allowances provided for in his first Budget. That meant an 18 per cent. increase in allowances, which exceeded the then statutory requirement of about 9 per cent. However, that would still mean an increase of between 8 and 10 per cent. in allowances this year, rather than a statutory 15 per cent., if he were to be enabled to claim that personal allowances were not lower in real terms, but he has provided nothing.
The Labour Government's holding Budget in 1979 increased the allowances by less than was necessary. Out of the kindness of our hearts we gave the Chancellor some margin for the increase that he carried through in 1979. He then presented the increase in VAT as necessary to finance the increase in personal allowances. He said as much in his Budget speech.
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In 1980 the Rooker-Wise requirement was met by what amounted to sleight of hand, because one-third of the cost of indexing personal allowances was recovered by abolishing the reduced rate band. That limited the value of the combined changes in income tax to 11 per cent. rather than the 18 per cent. claimed by the Chancellor. As a result of the sleight of hand and the back-door method of taxation the less well off—the mass of the population whom the Labour Party represents—are now hit in three ways. They have to carry a doubled value added tax, there is no reduced rate band of income tax and at the same time their personal allowances are worse than when the Tory Party took office.
It is worth repeating what everyone is missing as a consequence of the Budget. A single person's allowance is £1,345, when it should be £1,585. A married person's allowance is £2,145, when it should be £2,475. Everybody is missing out because of the disastrous calculations upon which the Government's economic strategy was based. They failed to calculate the burden and the expense of the depression that they forced on Britain. They failed to calculate the cost of the massive increase in unemployment

that they created. They failed to calculate the tax loss that unemployment would produce. They failed to calculate the loss in output because of the depression and the extra burdens imposed upon nationalised industries. All that meant a massive increase in expenditure, which they are now having to recoup from taxation.
The allowances are being fiddled because of the burden and the expense of the depression created by the Government. That makes a mockery of Conservative claims that Labour is the party of high taxation. The party of high taxation is the one that carries out its economic management through deflation, depression, unemployment and the strategies being adopted by the Government. Those strategies are far more expensive and far more of a tax burden than any strategy of expansion that the Labour Party would adopt if in power.
The strategies force the Government not only to increase taxation by a back-door method, but to become, as an article in The Times claimed last week, a Robin Hood in reverse. They are taking more from those who have least to give, to give to those who need it least. In 1979 the percentage of gross earnings, including child benefit, of a married man with two children on two-thirds of average earnings—the position of one-third of adult workers—being paid in tax and national insurance contributions was 18·7 per cent. As a result of this Budget and the failure to adjust the allowances, he is now paying 22·8 per cent.—and increase in his tax burden of 22 per cent. He is least able to bear it, but has been asked to do so by a Government who committed themselves to a reduction in taxation. The increase for a man on average earnings is less, but still substantial. The Government are redistributing income in the unfairest possible way.
The tax bills of the lowest earners are being increased substantially in order to reduce the tax bills of those with the highest incomes. By doing that the Government are widening the poverty trap tremendously. They are increasing it by about 40 per cent., and instead of 80,000 being affected, 110,000 are affected. Even worse, those who have been pushed into the poverty trap are being hit also by the disproportionate increase in VAT, which inevitably has a disproportionate impact on the lowest paid, as the work of the Low Pay Unit graphically demonstrates. The impact is more substantial on the low-paid than on the better-off. Also, the Low Pay Unit calculated that in November 1980 the tax free income of a typical family on average earnings was 78 per cent. of the supplementary benefit level. Next November it will be only 70 per cent.
I come next to amendment No. 56, which attempts to ameliorate the plight of retired women aged 60 to 64. Thanks to the Budget, that category of women will be paying tax for the first time. There are two operative factors: first, the upgrading of the increase of the single person's basic retirement pension to £29·60 last November, and, secondly, the freezing of personal allowances. That pushes them into the tax bracket. They are now receiving an income of £83 more than the £1,375 allowance. That comes within the concessionary tolerance and could be ignored. However, 200,000 of those women also receive a paltry amount—in many cases about 57p—of graduated pension. Anything more than 33p pushes them beyond the concessionary limit and into the tax net.
That ludicrous position has resulted from the Government's failure to increase allowances. Those


women are least able to pay tax, and least need to pay tax. They could be exempted from tax altogether, but instead they are being scooped into the tax net by the Government because of their disastrous failure to increase allowances. That has been forced on them by the Prime Minister who, two years ago yesterday, quoted St. Francis and spoke about healing, curing and bringing society together. She is now imposing a fiddling tax burden on a pathetic section of society which is least able to afford it. That is typical of the Budget consequences—the pettifogging, tax-dredging, burden-increasing Budget to which the Labour Party object and against which we shall vote in the Lobby shortly.
The Budget does everything that the Government said they would not do. It breaks the promises held out, and it now compels Government Back Benchers and Ministers to eat their brave words of four years ago and the Prime Minister's brave words of two years ago. It turns the Government from the brave hope of encouraging initiative and enterprise by reducing taxes to imposing taxes on women aged 60 to 64 who receive pensions of 57p a week. It forces more people into the poverty trap. The Government are acting like Robin Hood in reverse. They are taxing those least able to bear the burden of taxation so that those who can bear the burden maintain the exemptions given to them two years ago.

Mr. Clive Soley: There could be no better example of a bad Finance Bill than the one before us. The clause that the Committee is discussing underlines the bankruptcy of Tory Party policy, Tory Party promises at the 1979 general election, Tory philosophy and Tory Party economic and financial policy since the general election.
We all remember being told in 1979 that the Conservative Party was the party of low taxation and that it would cut income tax with the idea of helping those who wanted to save more on the basis that those savings would go into investment. We know that the money did not go into investment. Also, we know that when the tax cuts came they were primarily for the rich. Again, the theory was that the money would go into investment. There is no evidence that the income tax cuts for the better-off were used for that purpose.
The low-paid were not encouraged to work harder. At the end of the day they were worse off because of direct and indirect taxes. The philosphy has failed, the promises have failed and the policies since the election have failed. We know that investment is determined not by tax cuts pure and simple but by whether it is profitable to invest, and whether it is profitable depends on many other financial factors which the Government have not solved and which I would argue they have gone some way towards making much worse.
We must ask ourselves "Who suffers?" Under the clause, the low-paid will suffer more than any other group. The part of Hammersmith that I represent is not a high-paid area. My hon. Friend the Member for Batley and Morley (Mr. Woolmer) has given clear and good examples of the way in which the better-off have benefited. He talked of small savers with £75,000. That would bring a smile to many people's faces if it were not so serious. It is surely something about which we cannot smile.
It is not that the people are desperately poor, although obviously there are some desperately poor people in places such as Hammersmith. A person in receipt of an average income in Hammersmith will suffer from the Government's policies. I ask the Committee to consider the position of a young boy or girl who has been brought up in his or her parent's council house. Let us suppose that they want to marry and get a house of their own. They may well be in receipt of a wage that will make them liable to the tax that we are discussing. If they try to buy, they will be faced with the prospect that in the Hammersmith and West London area it is not possible to buy even a single bedroom flat for much less than £21,000. That means that one needs an income of £10,000 and savings of about £5,000.
How does a person begin to save for a sum like that when the tax threshold is not changed to his advantage, when national insurance contributions are increased and when rates are being increased? The Conservative Party often talks about rates being increased in Labour areas. Hammersmith, in common with Kensington and Chelsea and Wandsworth, has been subject to massive rate increases. There was a 48 per cent. increase by the Conservative administration in Hammersmith and Fulham. In the face of increases on that scale, it is not possible for people to save effectively, and they are not able to benefit from the Government's policies.
It was said during the 1979 general election that Labour was the party of high taxation. Everything that has happened since then suggests the opposite. The industrial survey of the group economics department of Barclays Bank of March 1981 states:
At home, final demand prospects are no more encouraging; wages are no longer keeping pace with price increases and consequently the volume of consumer's expenditure can only be sustained this year by a fall in the savings ratio. Worse still, aggregate investment actually seems likely to decline further this year despite lower interest rates.
It predicts
a further fall in private sector investment".
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That brings us back to the Conservative Party's promise to cut taxes and to ensure that the money so released would be put into investment to regenerate the economy. That was the underlying philosophy of the Government's economic strategy. Their aim was to regenerate Britain by liberating the small saver and the small business man. I do not know whether the small saver is the £75,000 man quoted by my hon. Friend the Member for Batley and Morley or someone living in Hammersmith, North and earning an average or below average income, but the Government will be unable to regenerate the economy with their present policy.
The Government, and particularly the Prime Minister, seem to have engendered the view that people must suffer if things are to get better. There is no reason to suffer unless things will really be much better. There is justice in suffering if the suffering is fairly apportioned. The same question has to be asked again—"Who is doing the suffering?" Most of those on higher incomes have not suffered very much. That would perhaps be acceptable if the Government's theory about those on higher incomes regenerating the economy had been proven to be true. As I have already indicated, that has not been proven. It is those on low incomes who seem to be suffering. They are being hit by increased fuel charges, increased national insurance rates, and rent and rate increases.
These are factors that are doing much damage to Britain's base. People are being driven into unemployment and into despair. That is because there is little to hope for in future. If we get that despair, we get the dangers to democracy that Conservative Members so often say are encouraged by the Left wing of the Labour Party. In such a situation it is not the Left wing that is a danger. The danger lies inevitably in the Right wing. The membership of Right-wing organisations grows at times of high unemployment and high inflation.
It is true that high inflation threatens the fabric of society, but so does high unemployment. If the group economics department of Barclays Bank is right in saying that there is nothing to indicate that home demand will increase or that demand from overseas will increase significantly, I suggest that the problem will become worse.
The Government must ask themselves how long the fabric of society will stand the present unemployment level. I put it to the Government that everything in the Bill, especially this clause, will do more to increase the burdens on low-income groups. That will undermine the Government's strategy and threaten the nation's social fabric.
I do not believe that anyone thinks that the low-paid can continue taking the sort of punishment that the Government are handing out to them. What does a man do if he is in receipt of a low income and is relying on tax reductions of the type that would have been made under the old Rooker-Wise amendment? What happens if that reduction is not forthcoming and at the same time gas and electricity tariffs increase? First, there is a massive increase in the number of disconnections. What happens when national insurance contributions increase or rates increase by nearly 50 per cent? What happens when rents increase and it is not possible to rent on the private market? These are questions that the Government must consider.
When we consider how well off the richer sections of society are, we must ask how that affluence can be justified on a moral basis and how long it will be before those in receipt of below average or average incomes question the very fabric of our society. They will say, and with some justice, that it is totally unfair and unreasonable to expect them to bear the present burden.
It was the Conservative Party that brought support to the Rooker-Wise amendment in the first instance and made it law. However, as soon as it became impolitic to support it, it suddenly abandoned ship and went back on its policy. If one believes that its intentions were good, which I am prepared to concede, it did so presumably so that the economy would be regenerated. However, there is no evidence of that happening.
If demand is to increase, it will have to come out of savings, as the Barclays Bank group states, but if one is on a low income either one does not have the savings or one is eating into the savings which were being put aside for something else. It is not always luxuries that are involved. The savings may have been made to buy a house if one is living with one's parents, and so on.
There is no justice and no economic sense in the clause. Above all, it underlines the bankruptcy of the Tory Party policy, philosophy and, economics because it picks on the low-paid to try to solve the problems of the nation while protecting the rich. That is a failure of philosophy, a

failure of policy, and, above all, a failure of the Government to deliver on their election promise, which was to reduce income tax.

Mr. Derek Foster: One of the puzzles of the debate is why there are so few contributions from Conservative Members.

Mr. William Hamilton: None at all.

Mr. Foster: As my hon. Friend says, there have been none at all. I wonder why that is. There was a time when Conservative Members pretended to support the principle which we are debating. Without their support, it would not have become the law of the land. However, all those people with admirable consciences about the issue are either absent or silent.
It was rumoured that there was to be a revolt on Government Benches when this matter was mooted in the Budget debate. That revolt has so petered out that Conservative Members cannot be bothered to attend or to speak on that great principle. Perhaps they have a bad conscience because they would rather not have the measure included in the Finance Bill at all. Perhaps they have realised that the decent thing would have been to raise the standard rate of taxation. By failing to do that and by failing to index the allowances, they are raising taxation by the back door. That should be exposed in every newspaper in the land for the disgrace of this approach. However, fortunately, the newspapers too are quiet on the issue. They are strangely silent about the patent bankruptcy of the economic and political strategy of the Government.
Having won the election in either the most naive or the most dishonest way, in promising to reduce the burden of taxation, after two years the Government have succeeded in increasing the burden of taxation. They have also suceeded in increasing public expenditure as a percentage of the gross domestic product. The Conservative Party was to be the party which could teach the rest of the world how to eliminate waste in the public sector. It was going to achieve such reductions in public expenditure as had never been seen before and it was going to do so purely by eliminating waste. However, we have seen an increase in the burden of public expenditure.
Unemployment has cost us about £10·7 billion in loss of output. It has cost us a further £8 billion in the payment' of benefits and the loss of taxation revenue. I am beginning to wonder when the Government will stop shovelling the taxpayers' money into the pit of unemployment and start investing it creatively.
We challenge the Government on why they cannot go forward with investments in public sector projects, such as the electrification of the railways and investment in British Telecommunications, which are commercial by anyone's standards. By some quirk in Treasury reasoning, the Government wish to crowd out investment when it is believed that investment is reducing and that it will go on reducing, and when £3 billion went overseas in investment last year.
The debate poignantly highlights the financial and political bankruptcy of the Conservative Party, which, having won the election on the magnificent promise to reduce the burden of taxation, is now given the applause of the empty Benches of its own supporters, as they realise that the burden of taxation must be increased.
That increased burden of taxation is enforcing a further deflation of the economy. In my part of the world—the North of England—where unemployment was 13·6 per cent. at the last count in the whole region and where 54 people are chasing every job, the last thing we need or want is a further deflation of the economy. When will the Government respond in a decently human way to the problem of unemployment? It is not true that one has to solve the problem of inflation before the problem of unemployment can be tackled.
Of course, there is a trade-off between inflation and unemployment. In my part of the world, we would accept an increase of an extra one or two points in inflation for the sake of reducing unemployment, but instead, the Government respond in that massively deflationary and unjust way. That increase in taxation by the back door, as my hon. Friend the Member for Hammersmith, North (Mr. Soley) rightly said, is an increase in taxation at the expense of the low-paid.
Some of us in the Labour Party were propelled into the House to try to make a contribution to solving two problems. One is unemployment and the other is low pay. Many of our constituents suffer far too greatly and have suffered for too long from both those problems. However, the Government are increasing those problems. Unemployment has increased by 1 million since the Conservative Party came to power. On top of that burden, the Government are increasing the burden of taxation on the low-paid.
The Conservative Party said that it was committed to removing the low paid from the taxation threshold. It boasted about how that was to be done, how humanitarian it was and what a proof it was that the Tory Party cared about the low-paid. That party is now increasing the burden of taxation upon the low-paid, not only by this measure, but by doubling VAT as soon as it came to power, so as to give a tremendous boost to the problem of inflation, to which it said that it was completely committed and which it could cure.
The Government now boast that they have reduced the level of inflation, but they have not yet reduced it to the rate which they inherited. After all their efforts and having created an extra million unemployed, 15 per cent. of manufacturing industry's output disappeared last year. That has been done to bring down inflation. That objective is the main plank in the Government's strategy. We have to bear increased unemployment and reduced output to bring down inflation, but after two years inflation is still higher than the rate that the Government inherited.
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The Government give us more and more painful medicine, believing that one day they will cure the patient. I warn the Financial Secretary that the patient has nearly been cured for all time. He has nearly died from the medicine that they have forced down his gullet. The last thing that the country wants is the same medicine again.
The Government have not only increased the burden of taxation on the low paid. The party that came to power wishing to show us the brave new incentive world, which would galvanise us into entrepreneurial activity, has widened the poverty trap from 40,000 to 110,000.
Widows between the ages of 60 and 64 may be paying tax for the first time. They cannot understand what they

have done to deserve the punishment and why they have been singled out to have their burden increased. Perhaps the Financial Secretary can explain.
As I have said, the debate has highlighted poignantly the financial and political bankruptcy of the Conservative Party. How can Conservatives, with their record over the past two years, go to the electorate, as many will tomorrow, and maintain the stance of believing in increasing incentives, reducing income tax and reducing public expenditure by eliminating waste? No wonder there are few Conservative Members here to defend their record. They are hanging their heads in shame in the bars and tea rooms, pretending that the debate is not happening. They should be here to defend their record. We shall call them to account later in the Lobby.

Mr. Allan Roberts: I support the amendment. It puts back the £2 billion to £2·4 billion taken out of the economy in the Budget by putting off raising personal allowances in line with inflation—and that sum is on top of £2½ billion taken out of the economy in increases in indirect taxation. As my hon. Friends have said, the honourable way to increase taxation would have been to increase the standard rate by 3p, which equates with what the Government are doing by not raising personal allowances.
The Government have tried to deceive the people into believing that they are not going back on the promise that they made at the election to reduce taxation. It is significant that they are increasing taxation in a way that hits people with lower incomes instead of people with higher incomes, whom they helped in their first Budget, which also shifted taxation significantly away from the rich towards the poor. The clause, unamended, is deflationary. The Government pretend that their Budget is not deflationary, but it is when they take £2·4 billion out of the economy by refusing to raise personal allowances. In addition, it hits the lower paid.
I represent Bootle, which suffers from social deprivation and poverty. Many of those lucky enough to have work earn only low wages. The area has a weak manufacturing base and many service industries and warehousing. Many people will be directly affected by the Government's refusal to raise personal allowances. In addition, my area in Merseyside suffers from high unemployment. In certain parts of my constituency, 25 per cent. of working males are unemployed. Because clause 23 will take money out of the economy, it will damp down demand and further increase unemployment. That is another reason why I support the amendment.
The Government justify their deflationary measures—their increases in taxation—by stating that they will reduce the public sector borrowing requirement. It is amusing, bemusing and worrying that the only people who agree with the Cabinet that the Government should not borrow and have to pay interest rates are members of the Militant Tendency of the Labour Party. Only the extreme left agrees with the Government's distaste for the PSBR. Members of the Cabinet are acting like latter-day Trotskyists in their opposition to Government borrowing.
The Prime Minister paints a simplistic picture. She challenges us to say how we would increase public expenditure. Will we print more, tax more or borrow more? We should borrow more. I do not agree with the Marxist Militant Tendency or the Government that it is intrinsically evil for the Government to borrow or to


increase the PSBR. The right hon. Lady and her Treasury colleagues simplify the issue by comparing the country with an average family. She talks about a family having to balance its budget. If it spends more than its income, it is in difficulty. It is an over-simplification to say that if the books do not balance the country is in difficulty. A family with sufficient advantage to borrow does so.
Any family knows the benefits of borrowing money to purchase a house or, these days, even a car whose value increases rather than depreciates as inflation continues. So long as any family owes less money than the value of the assets for which the money was borrowed, it is in an advantageous situation.
I am simplifying a little, just as Ministers do, but the same is generally true for the whole country. So long as the public sector borrowing requirement does not get completely out of hand, so long as the capital investment in which the Government are involved and which will create assets for the country outstrips the public sector borrowing requirement, just as it is an advantage and not a disadvantage for the average family or business to borrow money, the same should be and is true of the Government.
To impose swingeing tax increases on the British people, as clause 23 does, which will cause further hardship, unemployment and deflation, merely for a doctrinaire reason, namely, to reduce the public sector borrowing requirement, is a strange activity for a Conservative Government committed to the capitalist idea of borrowing and interest. Moreover, the increases in the public sector borrowing requirement with which clause 23 seeks to cope and which were apparently unaccounted for previously by the Government are in any case a direct result of their own actions in increasing taxation and cutting public expenditure in past Budgets and mini-Budgets.
By having to defer the raising of personal allowances in line with inflation, the Government have to take money out of the eocnomy to reduce a PSBR which has increased beyond the limits that they expected because they have to pay far more in unemployment and social security benefits as a consequence of previous increases in taxation and cuts in public expenditure which have deflated the economy in the past and have created the unemployment which is pushing up the PSBR.
I believe that the same will happen as a result of this Budget. In the long term, rather than reducing the PSBR as the Government intend, the deflationary consequences of the clause on the workings of the economy will create more unemployment and cause more de-industrialisation, pushing unemployment still higher and thus pushing the PSBR beyond the £10½ billion that the Government now predict that it is likely to be in the future.
I have given three reasons why the amendment should be supported. First, the reduction of £2·4 billion that the Government propose to make by failing to increase personal allowances will hit low-paid people and will cause hardship. Secondly, it will create more unemployment. Thirdly, the Government proposals are the direct result of their doctrinaire obsession with reducing the public sector borrowing requirement, but although that is their intention, that will not be the result.
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The amendment would put back £2·4 billion into the economy. This is just one small instance of the

Opposition's belief that the way to solve some of the nation's economic ills is not by deflation but by reflation. We need to reflate the economy and to create more demand at home for the goods which can be produced by our manufacturing industries. The way to do that is not to increase taxation in this way, but to reduce it and to reflate the economy. If that is not done, together with many other measures which need to be taken, the Government will not solve the country's economic problems. They will make them far worse.
The electors of Bootle sent me to this place in the hope that I and other Labour Members would advocate economic policies which would increase demand and create more employment rather than increasing unemployment.

Mr. Tim Eggar: What evidence do the electors of Bootle have for believing that reflation in the hon. Gentleman's terms would lead to increased output rather than to more inflation?

Mr. Roberts: The electors of Bootle believe that a country is worth the goods and services that it can produce. They believe that the 3 million unemployed, as the figure is likely soon to be, cannot be creating wealth, hut must be consuming it. If those people were employed, creating wealth and producing goods and services, the country would be better off. One way to put those people to work and to get them creating wealth is to put more money into the economy at this time and not to take money out. Taking money out dampens demand because nobody has the wherewithal to buy the goods that British industries produce. One way to increase demand is to increase personal allowances in line with inflation rather than to reduce them in real terms.
There are many other things which it would be out of order to discuss now but which the people of Bootle and of the country generally would like the Government to do to increase demand, to reflate the economy and to deal with the problems of unemployment. Certainly, the situation is exacerbated by a Government who, for doctrinaire reasons, are hell-bent on increasing taxation, although they were elected on a promise to reduce it.
I hope that at least some Conservative hon. Members will support the amendment. Certainly, to be consistent with what they said when they were in Opposition, they should join the Labour Members in the Lobby tonight. I hope that the Minister, when he replies, will deal with the question of the public sector borrowing requirement and explain why he believes intrinsically that that borrowing is wrong, although the Government's own documents published at the time of the Budget, their predictions, projections, and analyses of Government and public expenditure show that the amount of money to be spent by the Government in creating real wealth and investing in assets which will accrue to the wealth of the nation would far outstrip the borrowing.

Mr. Lawson: I have been present throughout the debate. Although one or two hon. Members have come lately into the Chamber, I think that it is appropriate for me now to reply briefly but, I hope, reasonably fully, to the various points that have been made. I shall not go through the individual contributions that were made. In some cases, I think that it might be kinder not to do so, but I shall do my best to attend to the various major points that have been made.
First, it was alleged that there was some kind of dishonesty—that was one of the words used—about the decision not to uprate personal allowances this year. Opposition Members spoke in particular of what they saw as a contrast between what we are doing now and what we did and said in Opposition in 1977, when the indexation of personal allowances first found its stormy way on to the statute book. I wholly repudiate that charge.

Mr. William Hamilton: The right hon. Gentleman would.

Mr. Lawson: Perhaps the hon. Gentleman would care to listen. He seldom listens. He is so puffed up by his own self-righteousness that he finds it difficult to listen to anyone else. Perhaps he will do me the courtesy of listening to me on this occasion. I could have spared him this. Had he been in the Chamber for the wind-up speeches on the Budget debate on 11 March, and had he been awake at the time, he would have heard a full reply on that point.
The position we have held consistently since 1977—it is on the record—is that if the Government wish to allow the real value of the allowances and thresholds on the higher rate bands to fall they should do so in an open manner and not by subterfuge. That is why we supported the so-called Rooker-Wise amendment of 1977—with which I am proud to have been associated—with the addition the order-making powers to which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) objected. This was the only way the amendment could be made in order in the 1977 Finance Bill. Last year we replaced this with the procedure that the Government would have to lay an order, as we have done, stating the fully indexed figures for the allowances and thresholds. If the Government did no more than that, those fully indexed allowances and thresholds would automatically come into effect. If they wanted lesser figures for those thresholds and allowances to come into effect, the Government would have to write that into the Finance Bill, and that we have done.
The whole process is open and above board, as it was not before. That is what we objected to, and that is why we spoke about truth in taxation, as the right hon. Member for Ashton-under-Lyne correctly reminded the Committee.
The very subsection that we are debating now would not have appeared at all in the old style Finance Bills, which the right hon. Gentleman when he was Financial Secretary to the Treasury sought to defend. Under the old style Finance Bills the existing monetary figures for allowances and thresholds would have continued through automatically. No legislation would be needed to achieve that end and there would be nothing to that effect in the Finance Bill. The only time when something appeared in the Finance Bill was if the Government decided to raise the thresholds and allowances in monetary terms. To leave them where they were required nothing.
We have now required the Government of the day—as we have done today—to come to the House of Commons and seek approval. So far from being dishonest, this is thoroughly honest and open. The idea that the procedure should be automatic was repudiated by the right hon. Gentleman when he was in office, and I think he repudiates it now. No doubt he will correct me if I am

wrong. He believes, as I do, that the Government of the day must have discretion to suggest that this should not be done, for whatever reason.
I have always believed that the procedure should not be automatic. That is why, when the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and Mrs. Audrey Wise tried to make the procedure automatic, I tabled my amendment to their amendment to make sure that the Government of the day would always have the right to come to the House of Commons and have enforced a lesser figure than the indexed figure.

Mr. Ioan Evans: The Financial Secretary referred to honesty in Government. Did not the Tory Party fight the election on the promise to reduce taxation? The Government have greatly increased both direct and indirect taxation. Departmental figures show that there has been a phenomenal increase in taxation under the present Government. How can the Financial Secretary talk about honesty in politics when the Tories fought the election on that promise?

Mr. Lawson: The hon. Gentleman knows that we inherited an economic situation of such gravity that, to keep public borrowing within bounds and to get the economy in a healthy condition, we have had, regrettably, to increase taxation. However the hon. Gentleman greatly exaggerates what has been done.
For the coming financial year, as the basis of the Budget proposals, the married man on average earnings will pay 21·8 per cent. of his earnings in income tax. When we came to office the figure was 21·6 per cent. That is the extent of the difference. It is not surprising that there has been this very small increase from 21·6 per cent. to 21·8 per cent. when the real average earnings of a married man have risen by 4 per cent. on a 1981–82 best estimate compared with 1978–79. So, even after tax, the average married man on average earnings is better off.

Mr. Horam: That is absolutely untrue. The man on average earnings is not better off; he is worse off than when the Government first came to office. I remind the Financial Secretary of the figures given in answer to a question asked by the hon. Member for Wolverhampton, North-East (Mrs. Short) in March, which showed that the total tax burden of indirect and direct taxation had increased under the Government from 36½ per cent. of GDP to 40 per cent. of GDP. That is an enormous burden on the average working person—not just the poor person. That is the charge that the Government have to face.

Mr. Lawson: I do not wish to bandy figures. The hon. Gentleman if referring to direct and indirect taxation together, total taxation as a percentage of GDP. I was talking about income tax as a proportion of a married man's average earnings. That is the basis on which most of the debate today has taken place.

Mr. Robert Sheldon: Will the right hon. Gentleman accept that, even in the limited area of direct taxation, the tax threshold for a married man with two children is the lowest it has ever been as a proportion of income, not by a small amount but by a large amount?

Mr. Lawson: I do not know what the right hon. Gentleman calls a small amount and a large amount. As a result of what we are obliged to do in this Budget, the Married Man's allowances will be 4 per cent. less in real terms than it was in 1978–79, the last year of the


Government in which the right hon. Gentleman served. It is gross exaggeration to say that it has fallen by a large amount. It has not. It is a small amount.
A subject which was debated at greater length by Opposition Members than was any other aspect was the distribution of the tax burden. Two points were raised: the effect of these measures on the lower paid, and the position of the widow between 60 and 64 years of age. It is necessary to correct a misconception about the poverty trap which was frequently referred to by the hon. Member for Batley and Morley (Mr. Woolmer) and others.
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As my right hon. Friend the Secretary of State for Social Services has already explained in a written answer, the high marginal so-called tax rates—they are more than just tax rates—which are often quoted as evidence of the existence of the poverty trap are rather more theoretical than real. In practice many benefits run on for a while even if income rises. There is not an immediate cut-off. For instance, the family income supplement runs on for a whole year. That is one of the most important elements in the alleged poverty trap. The Independent Study Commission on the Family gives an apt summary of the position when it said:
The idea that an increase in earnings can result in a sudden drop in disposable resources is a nonsense.
It is true that this year's decision on income tax allowances has widened the gap between the tax thresholds and the main social security benefits. But that wider gap is just as much a result of the increases we made in the benefits as of the fact that we were regrettably unable to raise the allowances this year.
In deciding to raise the benefits, our overriding aim was to prevent those who depend on those benefits from being worse off. We are confident that the expansion of the poverty trap as such, which is much smaller than has been mentioned by some Labour Members, will be temporary. There is no deepening of the poverty trap, but it has widened, probably by about 10,000 families or a few more.

Mr. Robert Sheldon: The right hon. Gentleman talks about a temporary situation. Can he elaborate on that?

Mr. Lawson: I cannot anticipate my right hon. and learned Friend's next Budget.
Quite apart from the question of the poverty trap, there is a mixture of fact and error in what Labour Members have been saying. If hon. Members look at the Government's record in office over the past two years, it will be seen that those who pay the higher rates of tax have received the greatest benefit. The reason is that we inherited high rates of marginal tax which were almost the highest in the civilised world, which were ludicrous and which we were committed to bring down. They were admitted to be absurd by many Members then on the Government Benches, including, for example, Lord Lever, one of the more perceptive Members on financial matters. [Interruption.] I believe he is not a Social Oemocrat but remains a somewhat sceptical member of the Labour Party. He said that these rates of tax were nonsense. Therefore, it was right for us to bring them down, as we have done.
Allowances, thresholds and higher rate bands together have to be seen as a whole because they comprise the whole structure of the system of income tax. The

commitment to index them, to the extent that there is a commitment, runs right across that range. This year we have indexed none of them and changed none of them. The effect is that the greatest burden, in percentage terms as well as in absolute terms, falls on those in the highest income bracket. [Interruption.] The hon. Member for Edinburgh, Central (Mr. Cook) says that that is not so. I can assure him that, whereas a married man on £3,500 a year has a 3·1 per cent. reduction in income, it rises gradually to a 4·4 per cent. reduction in after-tax income for a married man on £40,000 a year. For someone with £20,000 a year, the figure is 3·4 per cent. It is no good Opposition Members jeering simply because the figures disprove the contention they were seeking to make. Those are the facts.
As for single women, particularly widows aged 60 to 64 years, all of us know that for years widows of all ages have felt that they have a grievance about the tax system. Under Governments of both parties they have consistently been treated as single women while they feel, for various reasons which we all know because of representations from widows in our constituencies, that they should be treated better than other single women. That is a wider issue which we cannot go into now. You, Mr. Weatherill, would rightly say that I was out of order if I were to go into that. We attempted to do something about it in a modest way with the widow's bereavement allowance in last year's Finance Bill. That is really at the root of the complaints that are being made now.
In this measure we have treated women aged 60 to 64 years very fairly through the assessing tolerance which, as I think the Committee knows, means that if the income is £100 or less above the tax-threshold tax will not he levied on it although there is a technical liability to tax. That is a long-standing practice. That means that no widow who has no income other than the widow's pension will be liable to pay income tax. It is true that some widows with a little more will have to pay tax, but that goes right across the board. There is no reason to make a distinction in the case of widows and to say that if a widow has that much more it is monstrous that she should pay tax, but that if she has the same amount more from another source it is all right that she should pay tax. That is not a logical position to adopt. At some stage the widow, like everybody else, has to come into the tax net.
From the many representations that I have received, I think that the main grievance of widows is about the way the tax system treats them as a whole and has nothing to do with this Budget.

Mr. Cook: Nobody is suggesting that widows should be treated differently according to the source of their income. Will the Financial Secretary acknowledge that hitherto the graduated pension has been regarded, as it clearly is, as a part of the State pension and that, as a result of the failure to uprate the age allowance and the other personal allowances, for the first time widows aged 60 to 64 years who are receiving the graduated pension will be liable to income tax under this Budget brought in by a Government who pledged themselves to reducing the income tax burden on pensioners?

Mr. Lawson: I do not agree with the hon. Gentleman. The graduated pension has not been seen as a part of the basic State pension. It has been seen as an alternative to the occupational pension of many pensioners. [HON.


MEMBERS: "No."] What is the logic of distinguishing between the Boyd-Carpenter scheme and the new State scheme? What is the justice in distinguishing these two? They are of exactly the same status, and they are alternatives to an occupational pension.
I turn now to a fallacy which the hon. Member for Gateshead, west (Mr. Horam) perpetrated. It is a prevalent fallacy in Budget debates over the years. He suggested that at a stroke of a pen we were affecting the living standards of millions of people. I have always believed that that is manifest nonsense. The living standards of the people depend on the wealth of the country, what the country produces, what the people earn in real terms and the productivity of the country's industry, commerce, business and agriculture. It is absurd to suggest that if we wanted to we could have almost any rate of economic growth we liked simply by writing in the appropriate figure for income tax allowances. That is the logical consequence of the proposition which the hon. Gentleman was putting forward, and it is nonsense, but it takes us to the heart of the Government's decision—the question of the Budget judgment.
No one has really suggested that we should raise the taxation in some other way. Some have said that we would have done better instead to increase the basic rate of income tax, and that we should have increased it by 2½p or so. But that would have increased the marginal rate of tax for 24 million taxpayers out of a total of 26 million taxpayers. In other words, for the vast majority of the people it would have meant an increase in the marginal rate of tax. That surely would not be sensible, even the very poorest taxpayers would have been affected.
Therefore, looking at the incentive consequences, we felt clearly that the lesser evil would not be to index the allowances rather than to raise the basic rate of tax, which is the marginal rate of tax for the vast majority of the people in this country.

Mr. Woolmer: The Minister is not suggesting that there would be any different amount of taxation raised if it were raised by a 3p increase in the standard rate, instead of in this particular way, but the way that he has chosen takes more tax from lower-paid people. Why does he feel that the best way of levying the additional taxation is by levying it on the lower-paid?

Mr. Lawson: This is not levied on the lower-paid. What we have done affects everybody throughout the tax scale. The question, therefore, was: which would have the less damaging effect on incentives? We chose to do it in this way.
As to the Budget judgment, the argument that is put to us is that we should not have raised the money at all but borrowed a further £2¼ billion. I suppose that it is really a lot more than that, for with the vote on the petrol tax last week the Opposition were saying that we should add £½ billion to the borrowing requirement, so the figure is now £2¾ billion and is getting up towards the £3 billion mark.
As the Bill progresses through the House of Commons, we shall see how much the Opposition wish to add to the total borrowing requirement. They have been less than clear so far as to the figure to which they would like to see the borrowing requirement increased. They have been very coy about it. The right hon. Member for Stepney and Poplar (Mr. Shore) has been particularly coy about

revealing it. Perhaps we shall be able laboriously to tot it up and find out the answer as we go through the Bill amendment by amendment.

Mr. Robert Sheldon: The right hon. Gentleman's memory is rather short. He seems not to recall what happened in the past, when he was on the Opposition Benches, and amendments were moved frequently to reduce taxation. Oppositions do not win all their amendments. One cannot, therefore, simply add up the losses to the Revenue that each amendment would entail.

Mr. Lawson: That is a very interesting comment. If the Opposition had won the Division on the petrol tax, would they have refrained from moving the amendment that we are now considering? The right hon. Gentleman is suddenly silent. I shall be pleased to give way to him, but he is glued to the Bench, so what he was telling me a moment ago was nonsense. The effect would have been cumulative, because the Oppositon would have pushed both amendments. He knows that well enough, and he should not try to mislead the House.
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It was the judgment of the Chancellor of the Exchequer and of the Government that a borrowing requirement of £10½ billion was the most that we could afford, given the need to reinforce our success in the battle against inflation by a continual reduction in the rate of monetary growth, and given the desire to do that consistently with a gradual reduction in interest rates. We felt that that was the way to benefit industry and business most. It was nonsense for the hon. Member for Colne Valley (Mr. Wainwright), on behalf of the Liberal Party, to suggest that it would clobber industry.
For the Government to borrow more—the alternative that we have been offered—would be far more damaging to British industry, because of the interest rate consequences, than any increase in the personal income tax. It was our deliberate decision that, given the need to raise taxation, we would raise it from the personal sector rather than from business and industry. We chose not to take the easy way out, and then we are accused of having clobbered industry. I utterly reject the hon. Gentleman's proposition.

Mr. Richard Wainwright: The Financial Secretary knows from earlier debates on the Budget and on the Finance Bill that the Liberals do not for a moment accept his analogy as to the borrowing that would be necessary or the rates that would have to be paid to secure the money. Why does he go on repeating the illusion that we share the strange assumptions of himself and his Treasury colleagues?

Mr. Lawson: The hon. Gentleman is committed to living in cloud-cuckoo-land. He can do that because, as he knows well, his party will never be in office.
Clause 23 is an essential element in the Chancellor's Budget judgment. It is not something that he or we took any pleasure in deciding. It was an unpopular decison, but it was a right decision, and I ask the Committee to reject the amendment.

Mr. Cook: Several of my right hon. Friends have referred tonight to how little we have heard from the Government Benches. If there was one hon. Member on the Government Benches from whom a period of silence throughout the debate might have been more dignified, it


was the Financial Secretary, who played such a sterling part in getting on to the statute book the Rooker-Wise amendment, which is dishonoured by the clause that we are debating tonight.
This is, indeed, a major issue in the Budget and in the Finance Bill. It is right and natural that a number of hon. Members taking part in the debate should have referred to the Rooker-Wise amendment and the Rooker-Wise debates of 1977. But the House should have it clearly in its mind that, if we want to find an occasion when personal allowances were not uprated at all, we have to go back well beyond the debates of 1977. Indeed, we do not find a Finance Bill in which there was no uprating of personal allowances until we come to 1968, at a time when inflation was running at 2½ per cent.
Between 1968 and the present day there is no precedent for any Chancellor introducing a Budget which did not provide for an uprating of some personal allowances by some amount. That is the extent to which the Government have retreated from the campaign that they waged only two years ago, in which the Conservative Party persuaded the British people that, if returned, a Conservative Government would
cut income tax at all levels.
That is what was promised in the manifesto.
It is therefore natural that some of my hon. Friends should have used the debate to raise major points about the Government's policy. It was natural and proper that my hon. Friend the Member for Bolsover (Mr. Skinner) should have made a characteristically trenchant attack on the Government's economic policy, and that my hon. Friend the Member for Hammersmith, North (Mr. Soley) should have chosen to illustrate the dangers to our political and social fabric of the political philosophy being followed by the Government, who are putting the highest burden of taxation on the lowest paid.
It was also right that my hon. Friend the Member for Bishop Auckland (Mr. Foster) should have drawn the attention of the House to the way in which, over the last two years, the tax burden of the nation has increased under a Conservative Government. Indeed, on the figures which the Government themselves released in a parliamentary answer in March this year, in the two years in which they have been in office the tax burden, measured as a percentage of the national income, has increased by 10 per cent. In the light of that figure—which comes from their own mouths—one can describe the pledges, commitments and promises made during the last election about easy tax reductions only as the chicanery of the huckster.
My hon. Friend the Member for Fife, Central (Mr. Hamilton) rightly pointed to the contrast between last week's debate on the 20p increase in petrol and tonight's debate on this major issue, which will result in an increase in tax for every income tax payer. In addition, it will result in a notable and difficult increase for the low-paid. He reminded the House that when we debated the 20p increase in the price of petrol there were many speeches from Conservative Members. Indeed, when the Chancellor of the Exchequer had concluded his speech, Conservative Members on the Government Back Benches insisted on making their voices heard on behalf of their constituents.
Strangely, there was no commitment in the Conservative manifesto not to put up the tax on petrol. But there was a commitment in the Manifesto on personal allowances. The manifesto stated:

Raising tax thresholds will let the low paid out of the tax net altogether.
I can understand why that was worded in that way. The Conservative Party did not commit itself to doing anything, but it said that raising tax thresholds would have that effect.
It would be interesting to have a rerun of the 1979 general election. Perhaps a computer could simulate the election. We should then be able to see what the result of that election would have been if the Conservative manifesto had stated—as turned out to be the case—that lowering tax thresholds would bring into the tax net the even lower paid. After two years of Conservative Government that has happened.
It is possible to contrast not merely our debate this evening with that of last week, but tonight's debate with the debate on the Rooker-Wise amendment, which took place four years ago. That is a celebrated debate. No fewer than three members of the Government took part in that debate in support of the Rooker-Wise amendment. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who now serves in the Foreign Office, spoke after Mrs. Wise and said:
there was practically nothing in her speech which was not a sentiment with which I entirely agree".
The electors of Coventry may have misconstrued that support; that may partly account for the fact that my former hon. Friend was unable to join us after the 1979 election.
The hon. Member for Norfolk, South (Mr. MacGregor), also spoke. He is now in charge of the Government's policy on small businesses. As big businesses get smaller under this Government, there are an increasing number of small businesses. The hon. Member for Norfolk, South made a lengthy speech in support of the Rooker-Wise amendments, in the course of which he let fall the following candid observation:
There is a public relations aspect to these amendments".
I could not have expressed the then Opposition's support for the Rooker-Wise amendments more succinctly or clearly.
The third Minister who supported the amendments in that debate was the Financial Secretary. In the same debate he said:
I do not believe that the fall in the real value of these allowances would have occurred if the present Government had been obliged to state quite clearly that they proposed to cut personal allowances. I do not believe that it would have occurred."—[Official Report, Standing Committee D, 14 June 1977; c. 450–60.]
Four years ago the Financial Secretary said that he did not believe that a Government would fail to upgrade personal allowances if they were obliged to state that they were cutting them. It is extraordinary that he should be part of a Treasury team that has done exactly that.
It is usually a distressing and painful sight to see beliefs shattered and to see faith exposed and unfulfilled. The most remarkable aspect of the Financial Secretary's performance at the Dispatch Box today is that it seems that not a hair of his head has turned in anxiety or trouble at the discovery that his belief was wholly unfounded. He has discovered that a Government who came to power on a pledge to cut tax are prepared not to increase personal allowances. They are prepared to come to the House and to state explicitly—as they do in this clause—that they are cutting personal allowances and thereby increasing the tax burden.
The remarkable feature of this debate is that the case for uprating personal allowances is common ground between the Government and the Opposition. My hon. Friend the Member for Grimsby (Mr. Mitchell) in a cogent and well-briefed speech—if I may say so—quoted a statement by the Chancellor of the Exchequer in last year's Budget speech. The right hon. and learned Gentleman gave the reasons why he felt obliged to carry through the uprating in line with the Rooker-Wise amendment. I shall not weary the House with the quotation, but I shall restate the four grounds.
First, it was said that if the right hon. and learned Gentleman did not carry through the uprating it would have the effect of lowering the threshold at which taxpayers start paying income tax. That will be the precise result of this Bill. The Bill will lower the threshold at which an income holder starts paying income tax from 45 per cent. of average income to 38 per cent. of average income. On a very modest expectation about increases in income, the Bill will by the end of the financial year lower the threshold to 35 per cent. That is a full 10 per cent. drop. In other words, members of the public will become liable to income tax although they earn barely one-third of average earnings.
The second reason was that if the Chancellor of the Exchequer did not carry through the upratings, the number of people paying income tax would increase. That will be the precise effect of this Bill. In evidence to the Select Committee, the Treasury admitted that, as a result of the failure to uprate personal allowances, 700,000 taxpayers would not be taken out of tax despite their expectations. In the year to the next Finance Bill another 500,000 taxpayers will be added to the tax net. That is a total increase of 1¼ million taxpayers.
The third reason was that if the Chancellor of the Exchequer failed to carry through the uprating, it would narrow the gap between those in work and those out of work. Again, that will be one of the effects of this Bill. Previously, Conservative Members have made speeches on the "why work?" syndrome. We have not had the pleasure of the company of the hon. Member for Norfolk, North (Mr. Howell), who has spoken on this point in most debates on the Finance Bill. I can understand why the Whips Office might have found him an engagement miles away from the House. I can understand why it would be anxious to avoid him attending the debate. The Bill makes the "why work?" syndrome—if one is concerned about that—worse. It might be more helpful if the Government were to address their minds to the question not of "why work?", but of "what work?". If the Treasury team adopted that new priority we should welcome it. There can be no escape from the logical conclusion that the Bill makes the poverty trap worse.
The Secretary of State for Social Services gave us a speech on this subject during the Budget debate. He clarified the Government's thinking. He pointed out that the failure to uprate personal allowances would not deepen the poverty trap but widen it. Apparently, the poverty trap would be deepened only if the marginal rate of taxation were increased. Of course, in the last Finance Bill the Government increased the marginal rate of taxation for the new income tax payer, because they abolished the reduced

rate band. They increased the marginal rate of tax by 5p for the new income tax payer at the bottom of the threshold.
To use the metaphor of the Secretary of State for Social Services, there we have, succinctly, the Government's record on the poverty trap. Last year, they deepened the poverty trap; this year they have widened it. Each year the Government dig a bigger and bigger pit. At the next election, when Britain's income tax payers have an opportunity cast a vote on the Government's record, they will sink into it.
The fourth reason that the Chancellor of the Exchequer adduced in support of the uprating last year was that if he failed to uprate the personal allowances the heaviest burden would fall on the poorest section of the population. I find it interesting that last year the Chancellor should have stated candidly that it was necessary to carry through the full uprating to avoid the heaviest burden falling on the poorest sections of the community. We are faced with weasel words from the Treasury Bench proving that that is not the Government's concern.
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The Financial Secretary attempted to show that the burden does not fall, in percentage terms, most heavily on the poorest. I refer him to two independent sources—first, the work of the Institute of Fiscal Studies, which is not known to be a partisan organisation. The Financial Secretary asked us to address ourselves to the overall effect of the Budget. Taking the overall effect of the Budget and comparing it with the revalorisation of both personal allowances and indirect taxation, the institute came to the conclusion that for the household with double the average income the increase in taxation was equivalent to a 2 per cent. cut in weekly income. It also came to the conclusion that for the household with half the average income the increases in taxation were equivalent to a 6 per cent. cut in take home pay. There is a clear contrast provided by the figures. Those with more than the average income suffer a cut of 2 per cent. and those below it suffer a cut of 6 per cent.
The Financial Secretary invited us to look at the record as a whole. I am happy to do that and I refer him to another independent body—the Low Pay Unit—that produced a report this month in which the right hon. Gentleman's record as a whole is considered. One of the figures adduced in contemplating that record is that over the past two years in which he has been responsible for tax affairs, a family with earnings of two-thirds the national average has suffered a cut in take-home pay, as a result of increases in taxation, of £1·47. As the Financial Secretary generously admitted at one point, the further up the income scale one goes, the more beneficial is the overall record of the Government. Indeed, the family with five times the average income has not suffered a cut, but has benefited from the overall record of the Government by £60·65 per week. I cannot hope to produce a clearer contrast between the Government's treatment of the low paid and the high paid.

Mr. Lawson: Rubbish.

Mr. Cook: The Financial Secretary will have plenty of opportunities, in addressing meetings in Zurich and eleswhere, to rebut those figures with precise calculations. But the House will not accept a rebuttal of a closely argued pamphlet with plenty of statistical evidence based on


surveys of family income supplement and surveys carried out by the DHSS. The House will not accept a rebuttal of those closely argued calculations by a statement from a sedentary position to the effect that the pamphlet is rubbish.

Mr. Lawson: The family expenditure surveys—as many Labour Members who have been in office in the Departments concerned will know—are not believed to be reliable for those whose income is above one-and-a-half times the national average. Therefore, the figures for those with five times average earnings, which the hon. Gentleman quoted, are purely speculative and no credence should be placed on them.

Mr. Cook: In the past two minutes we have moved rapidly from the claim that the figures are rubbish to the claim that they are speculative. I am willing to give way again to the Financial Secretary if he wishes to quote fresh figures for those on five times average earnings. If those figures are speculative, what is the clear figure held by the Treasury? What is the Treasury's view on the matter? Is the figure £60·65? If that is speculative, is it speculative because it is too low or because it is too high? Let us hear the correct figure.
As this is an open-ended debate, I should be happy to give way. If the Financial Secretary is unwilling to respond to my generous, pressing invitations, the Committee will be well advised to accept that at least we have a figure, speculative or otherwise. I am not necessarily saying that the figure is speculative, but that it is a figure drawn from the family income supplement surveys and from the DHSS family expenditure surveys. Plenty of comments on methodology are made by the Low Pay Unit to which the right hon. Gentleman may wish to refer. In the fullness of time, if he wishes to give the Committee a less speculative and more correct figure, we should be interested to hear it and return to it on Report.

Dr. Jeremy Bray: My hon. Friend will understand that the Financial Secretary's tax difficulty in dealing with people with five times the national average income arises from the fact that such people have a discretion whether they spend out of income or wealth. Therefore, my hon. Friend will understand why the Financial Secretary has stopped all statistical analysis of the distribution of wealth under the proposals of Sir Derek Rayner. He does not want to know.

Mr. Cook: I agree with my hon. Friend about the effects of Sir Derek Rayner's review of the Government's statistical services. I repeat a prediction that I have made in the House—that I yet expect to see the tax and prices index go as an economy measure as it continues to condemn the Government's policies.
My hon. Friend has anticipated my next point. Of course, those with five times average income have flexibility in deciding whether they spend or save and whether they pay through direct or indirect taxation. However, the geat bulk of the population saves only a small proportion of income and spends most of it. It therefore has little choice about whether it pays indirect taxation through VAT.
My hon. Friend the Member for Batley and Morley (Mr. Woolmer) correctly and appropriately referred to the increase in VAT. The first thing that the Government did was to double VAT, despite a clear election pledge that

our claim that they would double VAT was a lie. It is worth while reminding the Committee of what was said at that time when the Chancellor of the Exchequer announced that he would fulfil——

Mr. D. N. Campbell-Savours: The Financial Secretary to the Treasury still says that it is a lie.

Mr. Cook: I suggest that the Financial Secretary reads the Budget debate for 1979 in which he will find that the Government increased VAT from 8 per cent. to 15 per cent. I will not split words with the right hon. Gentleman about whether 8 per cent. to 15 per cent. is a doubling. I will settle for "virtually" doubling. I remind the Committee of what the Chancellor said.

Mr. Lawson: I must correct the hon. Gentleman's arithmetic. First, there was a 12½ per cent. VAT rate in operation, about which the hon. Gentleman may have forgotten. Secondly, the average VAT rate when we came into office across the board was 5 per cent., with the rates at zero, 8 per cent. and 12½ per cent. The average VAT rate has now increased to 8 per cent. and if the hon. Gentleman thinks that 5 per cent. to 8 per cent. is doubling that would explain why his earlier figures were so suspect and speculative.

Mr. Cook: The front page of that edition of the Daily Mail has been scanned closely by myself and by many of my hon. Friends. It ranks high among our bedtime reading. I cannot remember, when I have re-read that fascinating historic document, that, when it came to branding as a lie Labour's claim that the Tories would double VAT, there was a footnote in small print which said that that was a lie with respect to the 12½ per cent. but was patently correct with respect to the 8 per cent. It simply said that it was a lie.
When the Chancellor of the Exchequer carried through that increase in 1979—my hon. Friend the Member for Grimsby (Mr. Mitchell) has generously allowed me to quote this to the Committee—he said:
the increase I make must be sufficient to provide for substantial and worthwhile reductions in income tax."—[Official Report, 12 June 1979; Vol. 968, c. 250.]
I am sorry to remind the House that we are still paying that higher rate of VAT at 15 per cent., with an average rate of 8 per cent. rather than 5 per cent., and we do not have those "substantial and worthwhile" cuts in income tax. Indeed, the income earner in Great Britain begins to pay income tax at a lower income than in 1979 and at a higher marginal rate than in 1979.
If there were any decency, integrity and honesty among Treasury Ministers they would admit that we can no longer have "substantial and worthwhile" cuts in income tax, but we could return to the 8 per cent. VAT that they inherited from the previous Government.
The story does not stop there. The Financial Secretary invited us to look at the record as a whole and I am happy to do so. As well as the increase in VAT, the reduced rate band was abolished last year. We were told that its abolition was necessary to implement the terms of the Rooker-Wise amendment. I refer the House to the percipient words of the hon. Member for Truro (Mr. Penhaligon)—perhaps we can rebuild pacts. He said:
The real question must be: What will they do next year; what will they succeed in abolishing next year to raise the £1,000 million that … they have fiddled from the low-paid? They have paid for the Rooker-Wise amendment by abolishing the lower rate band. What will they do next year?"—[Official Report, 2 June 1980; Vol. 985, c. 1179.]


The committee now knows. The Government have not tried to implement any part of Rooker-Wise. Unable to find any new device, either by increasing VAT or by abolishing the reduced rate band, to squeeze more money out of the lowest-paid, they have not attempted to uprate personal allowances by one penny.
I end by returning to one group of the low-paid who will be most affected by the Government's failure. Single women aged between 60 and 64 do not qualify for the age allowance until they reach 65 and are entitled only to the single person's allowance. As a result of the failure to uprate the single person's allowance, 200,000 women in that category are liable to enter the income tax bracket for the first time.
I had an exchange with the Financial Secretary on that point during his speech. I put it to him that the graduated pension is part of the State pension. He responded by cavilling that it was not part of the basic pension. I accept that, but it is undeniably part of the State pension and the Government should be embarrassed by the fact that, for the first time, a State pensioner receiving no income other than the State pension will be liable to income tax.
The figures are interesting. The average graduated pension received by women in that category is over 50p. However, if they receive only 33p a week in graduated pension that will carry them over the tolerance level and they will become liable to income tax on the full amount of their liability. If they receive a graduated pension of 33p a week they will be liable to income tax of 57p a week. In other words, as a result of getting 33p, they will be 24p worse off. That is the effect of the marginal rate of taxation to which they have been exposed.
7.45 pm
We are dealing with a group whose sole income is the State pension for a single person plus the munificent figure of 33p. They are exposed by this scandalous clause to the rigours of income taxation. It may be worth reminding the House what the Prime Minister said just before the 1979 election. Her words did not figure on the front page of the issue of the Daily Mail to which I referred, but they are interesting. She said:
Those pensioners who have another little pension of their own will benefit from our income tax reductions.
One cannot have a little pension, of any significance, of less than 33p—one cannot get littler than 33p. However, instead of being relieved of income tax, the women receiving that pension will be liable to tax for the first time. The whole Committee would admit, if it were candid, that that is a scandal.
Certainly the Prime Minister has shown some decent humility on the subject. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) wrote to her on 26 March and received a reply on 30 April in which she said:
As you will appreciate, the proposals which you make in your third paragraph to deal with this problem raise wider issues about the structure of personal income tax reliefs. I have therefore asked the Chancellor and his colleagues to consider your proposals and to reply to your letter.
I have checked with my hon. Friend the Member for Perry Barr and he assures me that he has, as yet, received no further reply.
I can understand that the Treasury team may feel that, since the problem was the creation of the Prime Minister—because she refused to contemplate an increase

in the standard rate, and they therefore felt obliged to abolish the uprating of personal allowances—it is unfair of her to pass the problem to them for a solution, but I point out, for the Financial Secretary's own benefit and with good-will to his future political career, that the Prime Minister regards the plight of women between 60 and 64 with that graduated pension as a problem. It is indeed a problem.
It is a major disgrace and an insult to the House that, given such a problem and such a scandalous imposition of a tax burden on a low-paid group, we should have heard the Financial Secretary reply to the debate without a single positive, constructive suggestion about how that problem should be dealt with.
Clearly, those widows will be cheated by the failure to uprate the personal allowances and will be cheated by the imposition of a tax on their graduated pension. It is cheating that is entirely of a piece with the failure of the Government to implement an amendment for which many Conservative Members fought when in Opposition.
I believe that when the public discover during the autumn that they are paying more income tax as a result of the Government's actions, there will be contempt and anger among that public. The House should demonstrate its own contempt and anger by voting against clause 23.

Question put, That the amendment be made:—

The Committee divided: Ayes 253, Noes 297.

Division No. 168]
[7.48pm


AYES

 Abse, Leo
Cunningham, G. (Islington S)


Adams, Allen
Cunningham, Dr J. (W'h'n)


Anderson, Donald
Dalyell, Tam


Archer, Rt Hon Peter
Davidson, Arthur


Ashley, Rt Hon Jack
Davies, Rt Hon Denzil (L'lli)


Ashton, Joe
Davies, Ifor (Gower)


Atkinson, N.(H'gey.)
Davis, Clinton (Hackney C)


Barnett, Guy (Greenwich)
Davis, T. (B'ham, Stechf'd)


Barnett, Rt Hon Joel (H'wd)
Deakins, Eric


Beith, A. J.
Dean, Joseph (Leeds West)


Benn, Rt Hon A. Wedgwood
Dempsey, James


Bennett, Andrew(St'kp't N)
Dewar, Donald


Bidwell, Sydney
Dixon, Donald


Booth, Rt Hon Albert
Dobson, Frank


Boothroyd, Miss Betty
Dormand, Jack


Bottomley, Rt Hon A.(M'b'ro)
Douglas-Mann, Bruce


Bradley, Tom
Dubs, Alfred


Bray, Dr Jeremy
Duffy, A. E. P.


Brocklebank-Fowler, C.
Dunn, James A.


Brown, Hugh D. (Provan)
Dunwoody, Hon Mrs G.


Brown, R. C. (N'castle W)
Eadie, Alex


Brown, Ron (E'burgh, Leith)
Eastham, Ken


Brown, Ronald W. (H'ckn'y S)
Edwards, R. (W'hampt'n S E)


Buchan, Norman
Ellis, Tom (Wrexham)


Callaghan, Jim (Midd't'n &amp; P)
English, Michael


Campbell, Ian
Ennals, Rt Hon David


Campbell-Savours, Dale
Evans, Ioan (Aberdare)


Canavan, Dennis
Evans, John (Newton)


Carmichael, Neil
Ewing, Harry


Carter-Jones, Lewis
Faulds, Andrew


Cartwright, John
Field, Frank


Clark, Dr David (S Shields)
Fitch, Alan


Cocks, Rt Hon M. (B'stol S)
Flannery, Martin


Cohen, Stanley
Fletcher, Raymond (Ilkeston)


Coleman, Donald
Fletcher, Ted (Darlington)


Concannon, Rt Hon J. D.
Foot, Rt Hon Michael


Conlan, Bernard
Ford, Ben


Cook, Robin F.
Forrester, John


Cowans, Harry
Foster, Derek


Cox, T. (W'dsw'th, Toot'g)
Foulkes, George


Craigen, J. M.
Fraser, J. (Lamb'th, N'w'd)


Crawshaw, Richard
Freud, Clement


Crowther, J. S.
Garrett, John (Norwich S)


Cryer, Bob
Garrett, W. E. (Wallsend)


Cunliffe, Lawrence
George, Bruce






Gilbert, Rt Hon Dr John
Morris, Rt Hon J. (Aberavon)


Ginsburg, David
Morton, George


Golding, John
Moyle, Rt Hon Roland


Gourlay, Harry
Mulley, Rt Hon Frederick


Graham, Ted
Newens, Stanley


Grant, George (Morpeth)
Oakes, Rt Hon Gordon


Grant, John (Islington C)
Ogden, Eric


Grimond, Rt Hon J.
O'Halloran, Michael


Hamilton, James (Bothwell)
O'Neill, Martin


Hamilton, W. W. (C'tral Fife)
Owen, Rt Hon Dr David


Hardy, Peter
Palmer, Arthur


Harrison, Rt Hon Walter
Parker, John


Hart, Rt Hon Dame Judith
Parry, Robert


Hattersley, Rt Hon Roy
Pavitt, Laurie


Haynes, Frank
Pendry, Tom


Healey, Rt Hon Denis
Penhaligon, David


Heffer, Eric S.
Powell, Raymond (Ogmore)


Hogg, N. (E Dunb't'nshire)
Prescott, John


Holland, S. (L'b'th, Vauxh'll)
Price, C. (Lewisham W)


Home Robertson, John
Race, Reg


Homewood, William
Radice, Giles


Hooley, Frank
Rees, Rt Hon M (Leeds S)


Horam, John
Richardson, Jo


Howells, Geraint
Roberts, Albert (Normanton)


Huckfield, Les
Roberts, Allan (Bootle)


Hudson Davies, Gwilym E.
Roberts, Ernest (Hackney N)


Hughes, Robert (Aberdeen N)
Roberts, Gwilym (Cannock)


Hughes, Roy (Newport)
Robertson, George


Janner, Hon Greville
Robinson, G. (Coventry NW)


Jay, Rt Hon Douglas
Rodgers, Rt Hon William


John, Brynmor
Rooker, J. W.


Johnson, Walter (Derby S)
Roper, John


Johnston, Russell (Inverness)
Ross, Ernest (Dundee West)


Jones, Rt Hon Alec (Rh'dda)
Rowlands, Ted


Jones, Barry (East Flint)
Ryman, John


Jones, Dan (Burnley)
Sever, John


Kerr, Russell
Sheerman, Barry


Kilroy-Silk, Robert
Sheldon, Rt Hon R.


Kinnock, Neil
Shore, Rt Hon Peter


Lambie, David
Short, Mrs Renée


Lamborn, Harry
Silkin, Rt Hon J. (Deptford)


Lamond, James
Silkin, Rt Hon S. C. (Dulwich)


Leadbitter, Ted
Silverman, Julius


Lestor, Miss Joan
Skinner, Dennis


Lewis, Arthur (N'ham NW)
Smith, Rt Hon J. (N Lanark)


Lewis, Ron (Carlisle)
Snape, Peter


Litherland, Robert
Soley, Clive


Lofthouse, Geoffrey
Spearing, Nigel


Lyon, Alexander (York)
Spriggs, Leslie


Lyons, Edward (Bradf'd W)
Stallard, A. W.


Mabon, Rt Hon Dr J. Dickson
Stewart, Rt Hon D. (W Isles)


McDonald, Dr Oonagh
Stoddart, David


McElhone, Frank
Stott, Roger


McGuire, Michael (Ince)
Strang, Gavin


McKay, Allen (Penistone)
Straw, Jack


McKelvey, William
Summerskill, Hon Dr Shirley


MacKenzie, Rt Hon Gregor
Thomas, Dafydd (Merioneth)


Maclennan, Robert
Thomas, Jeffrey (Abertillery)


McMahon, Andrew
Thomas, Mike (Newcastle E)


McNally, Thomas
Thomas, Dr R.(Carmarthen)


McNamara, Kevin
Thome, Stan (Preston South)


McTaggart, Robert
Tilley, John


McWilllam, John
Tinn, James


Magee, Bryan
Torney, Tom


Marshall, D(G'gow S'ton)
Urwin, Rt Hon Tom


Marshall, Dr Edmund (Goole)
Varley, Rt Hon Eric G.


Marshall, Jim (Leicester S)
Wainwrlght, R.(Colne V)


Martin, M(G'gow S'burn)
Walker, Rt Hon H.(D'caster)


Mason, Rt Hon Roy
Weetch, Ken


Maxton, John
Welsh, Michael


Maynard, Miss Joan
White, Frank R.


Meacher, Michael
White, J. (G'gow Pollok)


Mellish, Rt Hon Robert
Wigley, Dafydd


Mikardo, Ian
Willey, Rt Hon Frederick


Millan, Rt Hon Bruce
Williams, Rt Hon A.(S'sea W)


Miller, Dr M. S. (E Kilbride)
Wilson, Gordon (Dundee E)


Mitchell, Austin (Grimsby)
Wilson, Rt Hon Sir H.(H'ton)


Mitchell, R. C. (Soton Itchen)
Wilson, William (C'try SE)


Morris, Rt Hon A. (W'shawe)
Winnick, David


Morris, Rt Hon C. (O'shaw)
Woolmer, Kenneth





Wrigglesworth, Ian
Tellers for the Ayes:


Wright, Sheila
Mr. Hugh McCartney and


Young, David (Bolton E)
Mr. Ron Leighton.




NOES


Adley, Robert
Durant, Tony


Aitken, Jonathan
Eden, Rt Hon Sir John


Alexander, Richard
Edwards, Rt Hon N. (P'broke)


Amery, Rt Hon Julian
Eggar, Tim


Ancram, Michael
Elliott, Sir William


Arnold, Tom
Eyre, Reginald


Aspinwall, Jack
Fairbairn, Nicholas


Atkins, Robert(Preston N)
Fairgrieve, Russell


Atkinson, David (B'm'th,E)
Faith, Mrs Sheila


Baker, Kenneth(St.M'bone)
Farr, John


Baker, Nicholas (N Dorset)
Fell, Anthony


Banks, Robert
Fenner, Mrs Peggy


Beaumont-Dark, Anthony
Fisher, Sir Nigel


Bell, Sir Ronald
Fletcher, A. (Ed'nb'gh N)


Bendall, Vivian
Fletcher-Cooke, Sir Charles


Bennett, Sir Frederic (T'bay)
Fookes, Miss Janet


Benyon, Thomas (A'don)
Forman, Nigel


Benyon, W. (Buckingham)
Fowler, Rt Hon Norman


Berry, Hon Anthony
Fox, Marcus


Best, Keith
Fraser, Peter (South Angus)


Bevan, David Gilroy
Gardiner, George (Reigate)


Biffen, Rt Hon John
Garel-Jones, Tristan


Biggs-Davison, John
Glyn, Dr Alan


Blackburn, John
Goodhart, Philip


Blaker, Peter
Goodhew, Victor


Body, Richard
Gorst, John


Bonsor, Sir Nicholas
Gow, Ian


Boscawen, Hon Robert
Gower, Sir Raymond


Bottomley, Peter (W'wich W)
Grant, Anthony (Harrow C)


Bowden, Andrew
Gray, Hamish


Boyson, Dr Rhodes
Greenway, Harry


Braine, Sir Bernard
Griffiths, Peter Portsm'th N)


Bright, Graham
Grist, Ian


Brinton, Tim
Grylls, Michael


Brittan, Leon
Gummer, John Selwyn


Brooke, Hon Peter
Hamilton, Hon A.


Brotherton, Michael
Hamilton, Michael (Salisbury)


Brown, Michael(Brigg &amp; Sc'n)
Hampson, Dr Keith


Browne, John (Winchester)
Hannam, John


Bruce-Gardyne, John
Haselhurst, Alan


Bryan, Sir Paul
Havers, Rt Hon Sir Michael


Buchanan-Smith, Alick
Hawkins, Paul


Buck, Antony
Hawksley, Warren


Budgen, Nick
Hayhoe, Barney


Bulmer, Esmond
Heddle, John


Burden, Sir Frederick
Henderson, Barry


Butcher, John
Hicks, Robert


Butler, Hon Adam
Higgins, Rt Hon Terence L.


Cadbury, Jocelyn
Hill, James


Carlisle, John (Luton West)
Hogg, Hon Douglas (Gr'th'm)


Carlisle, Kenneth (Lincoln)
Holland, Philip (Carlton)


Carlisle, Rt Hon M. (R'c'n)
Hooson, Tom


Chalker, Mrs. Lynda
Hordern, Peter


Chapman, Sydney
Howell, Rt Hon D. (G'ldf'd)


Churchill, W. S.
Hunt, David (Wirral)


Clark, Hon A. (Plym'th, S'n)
Hunt, John (Ravensbourne)


Clark, Sir W. (Croydon S)
Hurd, Hon Douglas


Clarke, Kenneth (Rushcliffe)
Irving, Charles (Cheltenham)


Clegg, Sir Walter
Jenkin, Rt Hon Patrick


Cockeram, Eric
Jessel, Toby


Cope, John
Jopling, Rt Hon Michael


Cormack, Patrick
Kaberry, Sir Donald


Corrie, John
Kershaw, Anthony


Costain, Sir Albert
Kimball, Marcus


Cranborne, Viscount
King, Rt Hon Tom


Critchley, Julian
Knight, Mrs Jill


Crouch, David
Knox, David


Dean, Paul (North Somerset)
Lamont, Norman


Dickens, Geoffrey
Lang, Ian


Dorrell, Stephen
Langford-Holt, Sir John


Douglas-Hamilton, Lord J.
Latham, Michael


Dover, Denshore
Lawrence, Ivan


du Cann, Rt Hon Edward
Lawson, Rt Hon Nigel


Dunn, Robert (Dartford)
Lee, John






Le Marchant, Spencer
Rhys Williams, Sir Brandon


Lennox-Boyd, Hon Mark
Ridsdale, Sir Julian


Lewis, Kenneth (Rutland)
Rifkind, Malcolm


Lloyd, Ian (Havant &amp; W'loo)
Rippon, Rt Hon Geoffrey


Lloyd, Peter (Fareham)
Roberts, M. (Cardiff NW)


Loveridge, John
Roberts, Wyn (Conway)


Luce, Richard
Rossi, Hugh


Lyell, Nicholas
Rost, Peter


McCrindle, Robert
Sainsbury, Hon Timothy


Macfarlane, Neil
St. John-Stevas, Rt Hon N.


MacGregor, John
Scott, Nicholas


MacKay, John (Argyll)
Shaw, Giles (Pudsey)


Macmillan, Rt Hon M.
Shaw, Michael (Scarborough)


McNair-Wilson, M. (N'bury)
Shelton, William (Streatham)


McNair-Wilson, P. (New F'st)
Shepherd, Colin (Hereford)


McQuarrie, Albert
Shepherd, Richard


Madel, David
Shersby, Michael


Major, John
Silvester, Fred


Marland, Paul
Sims, Roger


Marlow, Tony
Skeet, T. H. H.


Marshall, Michael (Arundel)
Smith, Dudley


Marten, Neil (Banbury)
Speed, Keith


Mates, Michael
Speller, Tony


Mather, Carol
Spence, John


Maude, Rt Hon Sir Angus
Spicer, Jim (West Dorset)


Mawby, Ray
Spicer, Michael (S Worcs)


Mawhinney, Dr Brian
Sproat, Iain


Maxwell-Hyslop, Robin
Squire, Robin


Mayhew, Patrick
Stainton, Keith


Mellor, David
Stanbrook, Ivor


Meyer, Sir Anthony
Stanley, John


Miller, Hal (B'grove)
Steen, Anthony


Mills, Iain (Meriden)
Stevens, Martin


Mills, Peter (West Devon)
Stewart, Ian (Hitchin)


Miscampbell, Norman
Stewart, A.(E Renfrewshire)


Mitchell, David (Basingstoke)
Stokes, John


Moate, Roger
Stradling Thomas, J.


Monro, Hector
Tapsell, Peter


Montgomery, Fergus
Taylor, Robert (Croydon NW)


Moore, John
Taylor, Teddy (S'end E)


Morgan, Geraint
Temple-Morris, Peter


Morris, M. (N'hampton S)
Thomas, Rt Hon Peter


Morrison, Hon C. (Devizes)
Thorne, Neil (Ilford South)


Morrison, Hon P. (Chester)
Thornton, Malcolm


Murphy, Christopher
Townend, John (Bridlington)


Myles, David
Townsend, Cyril D, (B'heath)


Neale, Gerrard
Trippier, David


Needham, Richard
van Straubenzee, W. R.


Nelson, Anthony
Vaughan, Dr Gerard


Neubert, Michael
Viggers, Peter


Newton, Tony
Waddington, David


Nott, Rt Hon John
Wakeham, John


Onslow, Cranley
Waldegrave, Hon William


Oppenheim, Rt Hon Mrs S.
Walker, Rt Hon P.(W'cester)


Osborn, John
Walker, B. (Perth)


Page, Rt Hon Sir G. (Crosby)
Walker-Smith, Rt Hon Sir D.


Page, Richard (SW Herts)
Waller, Gary


Parris, Matthew
Walters, Dennis


Patten, Christopher (Bath)
Ward, John


Patten, John (Oxford)
Warren, Kenneth


Pawsey, James
Watson, John


Percival, Sir Ian
Wells, Bowen


Peyton, Rt Hon John
Wheeler, John


Pink, R. Bonner
Whitelaw, Rt Hon William


Pollock, Alexander
Whitney, Raymond


Porter, Barry
Wickenden, Keith


Prentice, Rt Hon Reg
Wiggin, Jerry


Price, Sir David (Eastleigh)
Wilkinson, John


Prior, Rt Hon James
Williams, D.(Montgomery)


Proctor, K. Harvey
Wolfson, Mark


Pym, Rt Hon Francis
Young, Sir George (Acton)


Raison, Timothy
Younger, Rt Hon George


Rathbone, Tim



Rees, Peter (Dover and Deal)
Tellers for the Noes:


Rees-Davies, W. R.
Mr. Alastair Goodlad and


Renton, Tim
Mr. Donald Thompson.


Rhodes James, Robert

Question accordingly negatived.

Amendment proposed: No. 17, in page 13, line 9, after `1981–82', insert 'except for age allowance'.—[Mr. Robert Sheldon.]

Question put, That the amendment be made:—

The Committee divided: Ayes 251, Noes 294.

Division No. 169]
[8.01 pm


AYES


Abse, Leo
Evans, John (Newton)


Adams, Allen
Ewing, Harry


Anderson, Donald
Faulds, Andrew


Archer, Rt Hon Peter
Field, Frank


Ashley, Rt Hon Jack
Fitch, Alan


Ashton, Joe
Flannery, Martin


Atkinson, N.(H'gey,)
Fletcher, Raymond (Ilkeston)


Barnett, Guy (Greenwich)
Fletcher, Ted (Darlington)


Barnett, Rt Hon Joel (H'wd)
Foot, Rt Hon Michael


Beith, A. J.
Ford, Ben


Benn, Rt Hon A. Wedgwood
Forrester, John


Bennett, Andrew(St'kp't N)
Foster, Derek


Bidwell, Sydney
Foulkes, George


Booth, Rt Hon Albert
Fraser, J. (Lamb'th, N'w'd)


Boothroyd, Miss Betty
Freud, Clement


Bottomley, Rt Hon A.(M'b'ro)
Garrett, John (Norwich S)


Bradley, Tom
Garrett, W. E. (Wallsend)


Bray, Dr Jeremy
George, Bruce


Brocklebank-Fowler, C.
Gilbert, Rt Hon Dr John


Brown, Hugh D. (Provan)
Ginsburg, David


Brown, R. C. (N'castle W)
Golding, John


Brown, Ron (E'burgh, Leith)
Gourlay, Harry


Brown, Ronald W. (H'ckn'y S)
Graham, Ted


Buchan, Norman
Grant, George (Morpeth)


Callaghan, Jim (Midd't'n &amp; P)
Grant, John (Islington C)


Campbell, Ian
Grimond, Rt Hon J.


Campbell-Savours, Dale
Hamilton, James (Bothwell)


Canavan, Dennis
Hamilton, W. W. (C'tral Fife)


Carmichael, Neil
Hardy, Peter


Carter-Jones, Lewis
Harrison, Rt Hon Walter


Cartwright, John
Hart, Rt Hon Dame Judith


Clark, Dr David (S Shields)
Hattersley, Rt Hon Roy


Cocks, Rt Hon M. (B'stol S)
Haynes, Frank


Cohen, Stanley
Healey, Rt Hon Denis


Coleman, Donald
Heffer, Eric S.


Concannon, Rt Hon J. D.
Hogg, N. (E Dunb't'nshire)


Conlan, Bernard
Holland, S. (L'b'th, Vauxh'll)


Cook, Robin F.
Home Robertson, John


Cowans, Harry
Homewood, William


Cox, T. (W'dsw'th, Toot'g)
Hooley, Frank


Craigen, J. M.
Horam, John


Crawshaw, Richard
Howells, Geraint


Crowther, J. S.
Huckfield, Les


Cryer, Bob
Hudson Davies, Gwilym E.


Cunliffe, Lawrence
Hughes, Robert (Aberdeen N)


Cunningham, G. (Islington S)
Hughes, Roy (Newport)


Cunningham, Dr J. (W'h'n)
Janner, Hon Greville


Dalyell, Tam
Jay, Rt Hon Douglas


Davidson, Arthur
John, Brynmor


Davies, Rt Hon Denzil (L'lli)
Johnson, Walter (Derby S)


Davies, Ifor (Gower)
Johnston, Russell (Inverness)


Davis, Clinton (Hackney C)
Jones, Rt Hon Alec (Rh'dda)


Davis, T. (B'ham, Stechf'd)
Jones, Barry (East Flint)


Deakins, Eric
Jones, Dan (Burnley)


Dean, Joseph (Leeds West)
Kerr, Russell


Dempsey, James
Kilroy-Silk, Robert


Dewar, Donald
Kinnock, Neil


Dixon, Donald
Lambie, David


Dormand, Jack
Lamborn, Harry


Douglas-Mann, Bruce
Lamond, James


Dubs, Alfred
Leadbitter, Ted


Duffy, A. E. P.
Lestor, Miss Joan


Dunn, James A.
Lewis, Arthur (N'ham NW)


Dunwoody, Hon Mrs G.
Lewis, Ron (Carlisle)


Eadie, Alex
Litherland, Robert


Eastham, Ken
Lofthouse, Geoffrey


Edwards, R. (W'hampt'n S E)
Lyons, Edward (Bradf'd W)


Ellis, Tom (Wrexham)
Mabon, Rt Hon Dr J. Dickson


English, Michael
McDonald, Dr Oonagh


Ennals, Rt Hon David
McElhone, Frank


Evans, Ioan (Aberdare)
McGuire, Michael (Ince)






McKay, Allen (Penistone)
Roper, John


McKelvey, William
Ross, Ernest (Dundee West)


MacKenzie, Rt Hon Gregor
Rowlands, Ted


Maclennan, Robert
Ryman, John


McMahon, Andrew
Sever, John


McNally, Thomas
Sheerman, Barry


McNamara, Kevin
Sheldon, Rt Hon R.


McTaggart, Robert
Shore, Rt Hon Peter


McWilliam, John
Short, Mrs Renée


Magee, Bryan
Silkin, Rt Hon J. (Deptford)


Marshall, D(G'gow S'ton)
Silkin, Rt Hon S. C. (Dulwich)


Marshall, Dr Edmund (Goole)
Silverman, Julius


Marshall, Jim (Leicester S)
Skinner, Dennis


Martin, M(G'gow S'burn)
Smith, Rt Hon J. (N Lanark)


Mason, Rt Hon Roy
Snape, Peter


Maxton, John
Soley, Clive


Maynard, Miss Joan
Spearing, Nigel


Meacher, Michael
Spriggs, Leslie


Mellish, Rt Hon Robert
Stallard, A. W.


Mikardo, Ian
Stewart, Rt Hon D. (W Isles)


Millan, Rt Hon Bruce
Stoddart, David


Miller, Dr M. S. (E Kilbride)
Stott, Roger


Mitchell, Austin (Grimsby)
Strang, Gavin


Mitchell, R. C. (Soton Itchen)
Straw, Jack


Morris, Rt Hon A. (W'shawe)
Summerskill, Hon Dr Shirley


Morris, Rt Hon C. (O'shaw)
Thomas, Dafydd (Merioneth)


Morris, Rt Hon J. (Aberavon)
Thomas, Jeffrey (Abertillery)


Morton, George
Thomas, Mike (Newcastle E)


Moyle, Rt Hon Roland
Thomas, Dr R.(Carmarthen)


Mulley, Rt Hon Frederick
Thorne, Stan (Preston South)


Newens, Stanley
Tilley, John


Oakes, Rt Hon Gordon
Tinn, James


Ogden, Eric
Torney, Tom


O'Halloran, Michael
Urwin, Rt Hon Tom


O'Neill, Martin
Varley, Rt Hon Eric G.


Owen, Rt Hon Dr David
Wainwright, R.(Colne V)


Palmer, Arthur
Walker, Rt Hon H.(D'caster)


Parker, John
Weetch, Ken


Parry, Robert
Welsh, Michael


Pavitt, Laurie
White, Frank R.


Pendry, Tom
White, J. (G'gow Pollok)


Penhaligon, David
Wigley, Dafydd


Powell, Raymond (Ogmore)
Willey, Rt Hon Frederick


Prescott, John
Williams, Rt Hon A.(S'sea W)


Price, C. (Lewisham W)
Wilson, Gordon (Dundee E)


Race, Reg
Wilson, Rt Hon Sir H.(H'ton)


Radice, Giles
Wilson, William (C'try SE)


Rees, Rt Hon M (Leeds S)
Winnick, David


Richardson, Jo
Woolmer, Kenneth


Roberts, Albert (Normanton)
Wrigglesworth, Ian


Roberts, Allan (Bootle)
Wright, Sheila


Roberts, Ernest (Hackney N)
Young, David (Bolton E)


Roberts, Gwilym (Cannock)



Robertson, George
Tellers for the Ayes:


Robinson, G. (Coventry NW)
Mr. Ron Leighton and


Rodgers, Rt Hon William
Mr. Hugh McCartney.


Rooker. J. W.





NOES


Adley, Robert
Biggs-Davison, John


Alexander, Richard
Blackburn, John


Amery, Rt Hon Julian
Blaker, Peter


Ancram, Michael
Body, Richard


Arnold, Tom
Bonsor, Sir Nicholas


Aspinwall, Jack
Boscawen, Hon Robert


Atkins, Robert(Preston N)
Bottomley, Peter (W'wich W)


Atkinson, David (B'm'th.E)
Bowden, Andrew


Baker, Kenneth(St.M'bone)
Boyson, Dr Rhodes


Baker, Nicholas (N Dorset)
Braine, Sir Bernard


Banks, Robert
Bright, Graham


Beaumont-Dark, Anthony
Brinton, Tim


Bell, Sir Ronald
Brittan, Leon


Bendall, Vivian
Brotherton, Michael


Bennett, Sir Frederic (T'bay)
Brown, Michael(Brigg &amp; Sc'n)


Benyon, Thomas (A'don)
Browne, John (Winchester)


Benyon, W. (Buckingham)
Bruce-Gardyne, John


Berry, Hon Anthony
Bryan, Sir Paul


Best, Keith
Buchanan-Smith, Alick


Bevan, David Gilroy
Buck, Antony


Biffen, Rt Hon John
Budgen, Nick





Bulmer, Esmond
Hordern, Peter


Burden, Sir Frederick
Howell, Rt Hon D. (G'ldf'd)


Butcher, John
Hunt, David (Wirral)


Butler, Hon Adam
Hunt, John (Ravensbourne)


Cadbury, Jocelyn
Hurd, Hon Douglas


Carlisle, John (Luton West)
Irving, Charles (Cheltenham)


Carlisle, Kenneth (Lincoln)
Jenkin, Rt Hon Patrick


Carlisle, Rt Hon M. (R'c'n)
Jessel, Toby


Chalker, Mrs. Lynda
Jopling, Rt Hon Michael


Chapman, Sydney
Kaberry, Sir Donald


Churchill, W. S.
Kershaw, Anthony


Clark, Hon A. (Plym'th, S'n)
Kimball, Marcus


Clark, Sir W. (Croydon S)
King, Rt Hon Tom


Clarke, Kenneth (Rushcliffe)
Knight, Mrs Jill


Clegg, Sir Walter
Knox, David


Cockeram, Eric
Lamont, Norman


Cope, John
Lang, Ian


Cormack, Patrick
Langford-Holt, Sir John


Corrie, John
Latham, Michael


Costain, Sir Albert
Lawrence, Ivan


Cranborne, Viscount
Lawson, Rt Hon Nigel


Critchley, Julian
Lee, John


Crouch, David
Le Marchant, Spencer


Dean, Paul (North Somerset)
Lennox-Boyd, Hon Mark


Dickens, Geoffrey
Lester, Jim (Beeston)


Dorrell, Stephen
Lewis, Kenneth (Rutland)


Dover, Denshore
Lloyd, Ian (Havant &amp; W'loo)


du Cann, Rt Hon Edward
Lloyd, Peter (Fareham)


Dunn, Robert (Dartford)
Loveridge, John


Durant, Tony
Luce, Richard


Eden, Rt Hon Sir John
Lyell, Nicholas


Edwards, Rt Hon N. (P'broke)
McCrindle, Robert


Eggar, Tim
Macfarlane, Neil


Elliott, Sir William
MacGregor, John


Fairbairn, Nicholas
MacKay, John (Argyll)


Fairgrieve, Russell
Macmillan, Rt Hon M.


Farr, John
McNair-Wilson, M. (N'bury)


Fell, Anthony
McNair-Wilson, P. (New F'st)


Fenner, Mrs Peggy
McQuarrie, Albert


Fisher, Sir Nigel
Madel, David


Fletcher, A. (Ed'nb'gh N)
Major, John


Fletcher-Cooke, Sir Charles
Marland, Paul


Fookes, Miss Janet
Marlow, Tony


Forman, Nigel
Marshall, Michael (Arundel)


Fowler, Rt Hon Norman
Marten, Neil (Banbury)


Fox, Marcus
Mates, Michael


Fraser, Peter (South Angus)
Mather, Carol


Gardiner, George (Reigate)
Maude, Rt Hon Sir Angus


Garel-Jones, Tristan
Mawby, Ray


Glyn, Dr Alan
Mawhinney, Dr Brian


Goodhart, Philip
Maxwell-Hyslop, Robin


Goodhew, Victor
Mayhew, Patrick


Goodlad, Alastair
Mellor, David


Gorst, John
Meyer, Sir Anthony


Gow, Ian
Miller, Hal (B'grove)


Gower, Sir Raymond
Mills, Iain (Meriden)


Grant, Anthony (Harrow C)
Mills, Peter (West Devon)


Gray, Hamish
Miscampbell, Norman


Green way, Harry
Mitchell, David (Basingstoke)


Griffiths, Peter Portsm'th N)
Moate, Roger


Grist, Ian
Monro, Hector


Grylls, Michael
Montgomery, Fergus


Gummer, John Selwyn
Moore, John


Hamilton, Hon A.
Morgan, Geraint


Hamilton, Michael (Salisbury)
Morris, M. (N'hampton S)


Hampson, Dr Keith
Morrison, Hon C. (Devizes)


Hannam, John
Morrison, Hon P. (Chester)


Haselhurst, Alan
Murphy, Christopher


Havers, Rt Hon Sir Michael
Myles, David


Hawkins, Paul
Neale, Gerrard


Hawksley, Warren
Needham, Richard


Hayhoe, Barney
Nelson, Anthony


Heddle, John
Neubert, Michael


Henderson, Barry
Newton, Tony


Hicks, Robert
Nott, Rt Hon John


Higgins, Rt Hon Terence L.
Onslow, Cranley


Hill, James
Oppenheim, Rt Hon Mrs S.


Hogg, Hon Douglas (Gr'th'm)
Osborn, John


Holland, Philip (Carlton)
Page, Rt Hon Sir G. (Crosby)


Hooson, Tom
Page, Richard (SW Herts)






Parris, Matthew
Stainton, Keith


Patten, Christopher (Bath)
Stanbrook, Ivor


Patten, John (Oxford)
Stanley, John


Pawsey, James
Steen, Anthony


Percival, Sir Ian
Stevens, Martin


Peyton, Rt Hon John
Stewart, Ian (Hitchin)


Pink, R. Bonner
Stewart, A.(E Renfrewshire)


Pollock, Alexander
Stokes, John


Porter, Barry
Stradling Thomas, J.


Prentice, Rt Hon Reg
Tapsell, Peter


Price, Sir David (Eastleigh)
Taylor, Robert (Croydon NW)


Prior, Rt Hon James
Taylor, Teddy (S'end E)


Proctor, K. Harvey
Temple-Morris, Peter


Pym, Rt Hon Francis
Thomas, Rt Hon Peter


Raison, Timothy
Thompson, Donald


Rathbone, Tim
Thorne, Nell (Ilford South)


Rees, Peter (Dover and Deal)
Thornton, Malcolm


Rees-Davies, W. R.
Townend, John (Bridlington)


Renton, Tim
Townsend, Cyril D, (B'heath)


Rhodes James, Robert
Trippier, David


Rhys Williams, Sir Brandon
van Straubenzee, W. R.


Ridsdale, Sir Julian
Vaughan, Dr Gerard


Rifkind, Malcolm
Viggers, Peter


Rippon, Rt Hon Geoffrey
Waddington, David


Roberts, M. (Cardiff NW)
Wakeham, John


Roberts, Wyn (Conway)
Waldegrave, Hon William


Rossi, Hugh
Walker, Rt Hon P.(W'cester)


Rost, Peter
Walker, B. (Perth)


Sainsbury, Hon Timothy
Walker-Smith, Rt Hon Sir D.


St. John-Stevas, Rt Hon N.
Walters, Dennis


Scott, Nicholas
Ward, John


Shaw, Giles (Pudsey)
Warren, Kenneth


Shaw, Michael (Scarborough)
Watson, John


Shelton, William (Streatham)
Wells, Bowen


Shepherd, Colin (Hereford)
Wheeler, John


Shepherd, Richard
Whitelaw, Rt Hon William


Shersby, Michael
Whitney, Raymond


Silvester, Fred
Wickenden, Keith


Sims, Roger
Wiggin, Jerry


Skeet, T. H. H.
Wilkinson, John


Smith, Dudley
Williams, D.(Montgomery)


Speed, Keith
Wolfson, Mark


Speller, Tony
Young, Sir George (Acton)


Spence, John
Younger, Rt Hon George


Spicer, Jim (West Dorset)



Spicer, Michael (S Worcs)
Tellers for the Noes:


Sproat, Iain
Lord James Douglas-Hamilton


Squire, Robin
and Mr. Peter Brooke

Amendment proposed: No. 56, in page 13, line 9, at end add
'except for women aged 60–64 years the personal relief shall be £1,425'.—[Mr. Robert Sheldon.]

Question put, That the amendment be made:

The Committee divided: Ayes 253, Noes 298.

Division No. 170]
[8.15 pm


AYES 

Abse, Leo
Brown, Ron (E'burgh, Leith)


Adams, Allen
Brown, Ronald W. (H'ckn'y S)


Anderson, Donald
Buchan, Norman


Archer, Rt Hon Peter
Callaghan, Jim (Midd't'n &amp; P)


Ashley, Rt Hon Jack
Campbell, Ian


Ashton, Joe
Campbell-Savours, Dale


Atkinson, N.(H'gey,)
Canavan, Dennis


Barnett, Guy (Greenwich)
Carmichael, Neil


Barnett, Rt Hon Joel (H'wd)
Carter-Jones, Lewis


Beith, A. J.
Cartwright, John


Benn, Rt Hon A. Wedgwood
Clark, Dr David (S Shields)


Bennett, Andrew(St'kp't N)
Cocks, Rt Hon M. (B'stol S)


Bidwell, Sydney
Cohen, Stanley 

Booth, Rt Hon Albert
Coleman, Donald


Boothroyd, Miss Betty
Concannon, Rt Hon J. D.


Bottomley, Rt Hon A.(M'b'ro)
Conlan, Bernard


Bradley, Tom
Cook, Robin F.


Bray, Dr Jeremy
Cowans, Harry


Brocklebank-Fowler, C.
Cox, T. (W'dsw'th, Toot'g)


Brown, Hugh D. (Provan)
Craigen, J. M.


Brown, R. C. (N'castle W)
Crawshaw, Richard





Crowther, J. S.
Jones, Rt Hon Alec (Rh'dda)


Cryer, Bob
Jones, Barry (East Flint)


Cunliffe, Lawrence
Jones, Dan (Burnley)


Cunningham, G. (Islington S)
Kerr, Russell


Cunningham, Dr J. (W'h'n)
Kilroy-Silk, Robert


Dalyell, Tarn
Kinnock, Neil


Davidson, Arthur
Lambie, David


Davies, Rt Hon Denzil (L'lli)
Lamborn, Harry


Davies, Ifor (Gower)
Lamond, James


Davis, Clinton (Hackney C)
Leadbitter, Ted


Davis, T. (B'ham, Stechf'd)
Leighton, Ronald


Deakins, Eric
Lestor, Miss Joan


Dean, Joseph (Leeds West)
Lewis, Arthur (N'ham NW)


Dempsey, James
Lewis, Ron (Carlisle)


Dewar, Donald
Litherland, Robert


Dixon, Donald
Lofthouse, Geoffrey


Dobson, Frank
Lyon, Alexander (York)


Dormand, Jack
Lyons, Edward (Bradf'd W)


Douglas-Mann, Bruce
Mabon, Rt Hon Dr J. Dickson


Dubs, Alfred
McCartney, Hugh


Duffy, A. E. P.
McDonald, Dr Oonagh


Dunn, James A.
McElhone, Frank


Dunwoody, Hon Mrs G.
McGuire, Michael (Ince)


Eadie, Alex
McKay, Allen (Penistone)


Eastham, Ken
McKelvey, William


Edwards, R. (W'hampt'n S E)
MacKenzie, Rt Hon Gregor


Ellis, Tom (Wrexham)
Maclennan, Robert


English, Michael
McMahon, Andrew


Ennals, Rt Hon David
McNally, Thomas


Evans, loan (Aberdare)
McNamara, Kevin


Evans, John (Newton)
McTaggart, Robert


Ewing, Harry
McWilliam, John


Faulds, Andrew
Magee, Bryan


Field, Frank
Marshall, D(G'gow S'ton)


Fitch, Alan
Marshall, Dr Edmund (Goole)


Flannery, Martin
Marshall, Jim (Leicester S)


Fletcher, Raymond (Ilkeston)
Martin, M(G'gow S'burn)


Fletcher, Ted (Darlington)
Mason, Rt Hon Roy


Foot, Rt Hon Michael
Maxton, John


Ford, Ben
Maynard, Miss Joan


Forrester, John
Meacher, Michael


Foster, Derek
Mellish, Rt Hon Robert


Foulkes, George
Mikardo, Ian


Fraser, J. (Lamb'th, N'w'd)
Millan, Rt Hon Bruce


Freud, Clement
Miller, Dr M. S. (E Kilbride)


Garrett, John (Norwich S)
Mitchell, Austin (Grimsby)


Garrett, W. E. (Wallsend)
Mitchell, R. C. (Soton Itchen)


George, Bruce
Morris, Rt Hon A. (W'shawe)


Gilbert, Rt Hon Dr John
Morris, Rt Hon C. (O'shaw)


Ginsburg, David
Morris, Rt Hon J. (Aberavon)


Golding, John
Morton, George


Gourlay, Harry
Moyle, Rt Hon Roland


Graham, Ted
Mulley, Rt Hon Frederick


Grant, George (Morpeth)
Newens, Stanley


Grant, John (Islington C)
Oakes, Rt Hon Gordon


Grimond, Rt Hon J.
Ogden, Eric


Hamilton, W. W. (C'tral Fife)
O'Halloran, Michael


Hardy, Peter
O'Neill, Martin


Harrison, Rt Hon Walter
Owen, Rt Hon Dr David


Hart, Rt Hon Dame Judith
Palmer, Arthur


Hattersley, Rt Hon Roy
Parker, John


Haynes, Frank
Parry, Robert


Healey, Rt Hon Denis
Pavitt, Laurie


Heffer, Eric S.
Pendry, Tom


Hogg, N. (E Dunb't'nshire)
Penhaligon, David


Holland, S. (L'b'th, Vauxh'll)
Powell, Raymond (Ogmore)


Home Robertson, John
Prescott, John


Homewood, William
Price, C. (Lewisham W)


Hooley, Frank
Race, Reg


Horam, John
Radice, Giles


Howells, Geraint
Rees, Rt Hon M (Leeds S)


Huckfield, Les
Richardson, Jo


Hudson Davies, Gwilym E.
Roberts, Albert (Normanton)


Hughes, Robert (Aberdeen N)
Roberts, Allan (Bootle)


Hughes, Roy (Newport)
Roberts, Ernest (Hackney N)


Janner, Hon Greville
Roberts, Gwilym (Cannock)


Jay, Rt Hon Douglas
Robertson, George


John, Brynmor
Robinson, G. (Coventry NW)


Johnson, Walter (Derby S)
Rodgers, Rt Hon William


Johnston, Russell (Inverness)
Rooker, J. W.






Roper, John
Thomas, Dr R. (Carmarthen)


Ross, Ernest (Dundee West)
Thorne, Stan (Preston South)


Rowlands, Ted
Tilley, John


Ryman, John
Torney, Tom


Sever, John
Urwin, Rt Hon Tom


Sheerman, Barry
Varley, Rt Hon Eric G.


Sheldon, Rt Hon R.
Wainwright, H.(Colne V)


Shore, Rt Hon Peter
Walker, Rt Hon H.(D'caster)


Short, Mrs Renée
Weetch, Ken


Silkin, Rt Hon J. (Deptford)
Welsh, Michael


Silkin, Rt Hon S. C. (Dulwich)
White, Frank R.


Silverman, Julius
White, J. (G'gow Pollok)


Skinner, Dennis
Wigley, Dafydd


Smith, Rt Hon J. (N Lanark)
Willey, Rt Hon Frederick


Snape, Peter
Williams, Rt Hon A,(S'sea W)


Soley, Clive
Wilson, Gordon (Dundee E)


Spearing, Nigel
Wilson, Rt Hon Sir H.(H'ton)


Spriggs, Leslie
Wilson, William (C'try SE)


Stallard, A. W.
Winnick, David


Stewart, Rt Hon D. (W Isles)
Woolmer, Kenneth


Stoddart, David
Wrigglesworth, Ian


Stott, Roger
Wright, Sheila


Strang, Gavin
Young, David (Bolton E)


Straw, Jack



Summerskill, Hon Dr Shirley
Tellers for the Ayes:


Thomas, Dafydd (Merioneth)
Mr. James Hamilton and Mr. James Tinn.


Thomas, Jeffrey (Abertillery)



Thomas, Mike (Newcastle E)





NOES


Adley, Robert
Chalker, Mrs. Lynda


Alexander, Richard
Chapman, Sydney


Amery, Rt Hon Julian
Churchill, W. S.


Ancram, Michael
Clark, Hon A. (Plym'th, S'n)


Arnold, Tom
Clark, Sir W. (Croydon S)


Aspinwall, Jack
Clarke, Kenneth (Rushcliffe)


Atkins, Robert(Preston N)
Clegg, Sir Walter


Atkinson, David (B'm'th,E)
Cockeram, Eric


Baker, Kennetb(St.M'bone)
Cope, John


Baker, Nicholas (N Dorset)
Cormack, Patrick


Banks, Robert
Corrie, John


Beaumont-Dark, Anthony
Costain, Sir Albert


Bell, Sir Ronald
Cranborne, Viscount


Bendall, Vivian
Critchley, Julian


Bennett, Sir Frederic (T'bay)
Crouch, David


Benyon, Thomas (A'don)
Dean, Paul (North Somerset)


Benyon, W. (Buckingham)
Dickens, Geoffrey


Berry, Hon Anthony
Dorrell, Stephen


Best, Keith
Dover, Denshore


Bevan, David Gilroy
du Cann, Rt Hon Edward


Biffen, Rt Hon John
Dunn, Robert (Dartford)


Biggs-Davison, John
Durant, Tony


Blackburn, John
Dykes, Hugh


Blaker, Peter
Eden, Rt Hon Sir John


Body, Richard
Edwards, Rt Hon N. (P'broke)


Bonsor, Sir Nicholas
Eggar, Tim


Bottomley, Peter (W'wich W)
Elliott, Sir William


Bowden, Andrew
Eyre, Reginald


Boyson, Dr Rhodes
Fairbairn, Nicholas


Braine, Sir Bernard
Fairgrieve, Russell


Bright, Graham
Faith, Mrs Sheila


Brinton, Tim
Farr, John


Brittan, Leon
Fell, Anthony


Brooke, Hon Peter
Fenner, Mrs Peggy


Brotherton, Michael
Fisher, Sir Nigel


Brown, Michael(Brigg &amp; Sc'n)
Fletcher, A. (Ed'nb'gh N)


Browne, John (Winchester)
Fletcher-Cooke, Sir Charles


Bruce-Gardyne, John
Fookes, Miss Janet


Bryan, Sir Paul
Forman, Nigel


Buchanan-Smith, Alick
Fowler, Rt Hon Norman


Buck, Antony
Fox, Marcus


Budgen, Nick
Fraser, Peter (South Angus)


Bulmer, Esmond
Gardiner, George (Reigate)


Burden, Sir Frederick
Garel-Jones, Tristan


Butcher, John
Glyn, Dr Alan


Butler, Hon Adam
Goodhart, Philip


Cadbury, Jocelyn
Goodhew, Victor


Carlisle, John (Luton West)
Goodlad, Alastair


Carlisle, Kenneth (Lincoln)
Gorst, John


Carlisle, Rt Hon M. (R'c'n)
Gow, Ian





Gower, Sir Raymond
Mills, Iain (Meriden)


Grant, Anthony (Harrow C)
Mills, Peter (West Devon)

 Gray, Hamish
Miscampbell, Norman


Greenway, Harry
Mitchell, David (Basingstoke)


Griffiths, Peter Portsm'th N)
Moate, Roger


Grist, Ian
Monro, Hector


Grylls, Michael
Montgomery, Fergus


Gummer, John Selwyn
Moore, John


Hamilton, Hon A.
Morgan, Geraint


Hamilton, Michael (Salisbury)
Morris, M. (N'hampton S)


Hampson, Dr Keith
Morrison, Hon C. (Devizes)


Hannam,John
Morrison, Hon P. (Chester)


Haselhurst, Alan
Murphy, Christopher


Havers, Rt Hon Sir Michael
Myles, David


Hawkins, Paul
Neale, Gerrard


Hawksley, Warren
Needham, Richard
 
Hayhoe, Barney
Nelson, Anthony


Heddle, John
Neubert, Michael


Henderson, Barry
Newton, Tony


Hicks, Robert
Nott, Rt Hon John


Higgins, Rt Hon Terence L.
Onslow, Cranley


Hill, James
Oppenheim, Rt Hon Mrs S.


Hogg, Hon Douglas (Gr'th'm)
Osborn, John


Holland, Philip (Carlton)
Page, Rt Hon Sir G. (Crosby)


Hooson, Tom
Page, Richard (SW Herts)


Hordern, Peter
Parris, Matthew


Howe, Rt Hon Sir Geoffrey
Patten, Christopher (Bath)


Hunt, David (Wirral)
Patten, John (Oxford)


Hunt, John (Ravensbourne)
Pawsey, James


Hurd, Hon Douglas
Percival, Sir Ian


Irving, Charles (Cheltenham)
Peyton, Rt Hon John


Jenkin, Rt Hon Patrick
Pink, R. Bonner


Jessel, Toby
Pollock, Alexander


Jopling, Rt Hon Michael
Porter, Barry


Kaberry, Sir Donald
Prentice, Rt Hon Reg


Kershaw, Anthony
Price, Sir David (Eastleigh)


Kimball, Marcus
Prior, Rt Hon James


King, Rt Hon Tom
Proctor, K. Harvey


Knight, Mrs Jill
Pym, Rt Hon Francis


Knox, David
Raison, Timothy


Lamont, Norman
Rathbone, Tim


Lang, Ian
Rees, Peter (Dover and Deal)


Langford-Holt, Sir John
Rees-Davies, W. R.


Latham, Michael
Renton, Tim


Lawrence, Ivan
Rhodes James, Robert


Lawson, Rt Hon Nigel
Rhys Williams, Sir Brandon


Lee, John
Ridsdale, Sir Julian


Le Marchant, Spencer
Rifkind, Malcolm


Lennox-Boyd, Hon Mark
Rippon, Rt Hon Geoffrey


Lester, Jim (Beeston)
Roberts, M. (Cardiff NW)


Lewis, Kenneth (Rutland)
Roberts, Wyn (Conway)


Lloyd, Ian (Havant &amp; W'loo)
Rossi, Hugh


Lloyd, Peter (Fareham)
Rost, Peter


Loveridge, John
Sainsbury, Hon Timothy


Luce, Richard
St. John-Stevas, Rt Hon N.


Lyell, Nicholas
Scott, Nicholas


McCrindle, Robert
Shaw, Giles (Pudsey)


Macfarlane, Neil
Shaw, Michael (Scarborough)


MacGregor, John
Shelton, William (Streatham)


MacKay, John (Argyll)
Shepherd, Colin (Hereford)
 

Macmillan, Rt Hon M.
Shepherd, Richard


McNair-Wilson, M. (N'bury)
Shersby, Michael


McNair-Wilson, P. (New Fst)
Silvester, Fred


McQuarrie, Albert
Sims, Roger


Madel, David
Skeet, T. H. H.


Major, John
Smith, Dudley


Marland, Paul
Speed, Keith


Marlow, Tony
Speller, Tony


Marshall, Michael (Arundel)
Spence, John


Marten, Neil (Banbury)
Spicer, Jim (West Dorset)


Mates, Michael
Spicer, Michael (S Worcs)


Mather, Carol
Sproat, Iain


Maude, Rt Hon Sir Angus
Squire, Robin


Mawby, Ray
Stainton, Keith


Mawhinney, Dr Brian
Stanbrook, Ivor


Maxwell-Hyslop, Robin
Stanley, John


Mayhew, Patrick
Steen, Anthony


Mellor, David
Stevens, Martin


Meyer, Sir Anthony
Stewart, Ian (Hitchin)


Miller, Hal (B'grove)
Stewart, A.(E Renfrewshire)






Stokes, John
Walker-Smith, Rt Hon Sir D.


Stradling Thomas, J.
Waller, Gary


Tapsell, Peter
Walters, Dennis


Taylor, Robert (Croydon NW)
Ward, John


Taylor, Teddy (S'end E)
Warren, Kenneth


Temple-Morris, Peter
Watson, John


Thomas, Rt Hon Peter
Wells, Bowen


Thompson, Donald
Wheeler, John


Thorne, Neil (Ilford South)
Whitelaw, Rt Hon William


Thornton, Malcolm
Whitney, Raymond


Townend, John (Bridlington)
Wickenden, Keith


Townsend, Cyril D, (B'heath)
Wiggin, Jerry


Trippier, David
Wilkinson, John


van Straubenzee, W. R.
Williams, D.(Montgomery)


Vaughan, Dr Gerard
Wolfson, Mark


Viggers, Peter
Young, Sir George (Acton)


Waddington, David
Younger, Rt Hon George


Wakeham, John



Waldegrave, Hon William
Tellers for the Noes:


Walker, Rt Hon P.(W'cester)
Lord James Douglas-Hamilton


Walker, B. (Perth)
and Mr. Robert Boscawen.

Question accordingly negatived.

Question proposed, That Bill.

Mr. Robert Sheldon: Even in this wretched clause we can see a faint glow in the provision to increase the blind allowance. It is set out in the precise terms of an amendment moved by my hon. Friend the Member for Edinburgh, Central (Mr. Cook) during Committee stage of the Finance Bill last year.
It is a useful provision, but we must remember that it will cost the Revenue only about £1 million as opposed to the £2·2 billion forgone because of the Government's failure to index personal allowances. Nevertheless, we are grateful for even small mercies, and I express that gratitude today.

Question put and agreed to.

Clause 23 ordered to stand part of the Bill.

Clause 19

CHARGE OF INCOME TAX FOR 1981–82

Mr. Cook: I beg to move amendment No. 14, in page 12, line 6, at end insert:—
'(a) in respect of so much of an individual's total income as does not exceed £900 at the rate of 25 per cent.'.
There is considerable logic in coming to this debate following the Division that we have just completed. The amemdment would restore the reduced rate band that was abolished in last year's Budget.
This may be an appropriate time to take up a reference made by the Financial Secretary during the previous debate about the reduction of the marginal rate of taxation on high earners. He said that it was necessary both in the Government's last Budget and in their first Budget to tackle the marginal rate on the higher-paid because the rates were nonsense, a disincentive, and had all the other adverse economic effects that those of us who have sat through the debates are accustomed to hearing from Conservative Members.
One of the paradoxes of the Government's policy is that, having said that it was necessary for all sorts of economic and social reasons to reduce the marginal rates on the higher paid, they last year increased the marginal rate on the low-paid from 25p to 30p. By doing so they increased taxation, on their own estimates—I do not pray

in aid any speculative figures produced by the low Paid Unit—for 2¼ million taxpayers. That is a large proportion of the overall total.
8.30 pm
When the reduced rate band was abolished in the previous Budget, it was explicitly and clearly stated by the Chancellor that he was abolishing the reduced rate band and that he intended to use the money thereby saved to increase the thresholds by implementing in full the uprating under the Rooker-Wise amendment. Those thresholds have since been abandoned. The effect of inflation has meant that the thresholds have fallen. They are worth 15 per cent. less than they were when the Chancellor made his speech a year ago.
In our previous debate we were unable to persuade, cajole or hector Conservative Members to change their minds. They have not drowned us with their oratory and advocacy in defending the Government's position but they have overwhelmed us by their numbers in the Divisions. As a result, the thresholds to which the Chancellor referred a year ago no longer obtain. As they have fallen below the point about which he was talking in 1980, it seems apt and appropriate for us to seek to reopen the issue of the reduced rate band, which was abolished to increase thresholds a year ago.
It is apt that we should reopen the issue following a debate in which there were a number of references to the problems of the elderly and of the old age taxpayer. One of the arguments adduced by the Treasury Bench last year in favour of abolishing the reduced rate band was that the bulk of taxpayers within the reduced rate band were part-time earners such as pensioners, housewives and students. The preceding vote will have a serious effect on pensioners. Most of those who will commence paying income tax for the first time in the coming year will be old age pensioners. They are now to become old age taxpayers.
If it was the case a year ago that the reduced rate band was a weak incentive to work because in the main it was benefiting old age pensioners, there is all the more reason for the reduced rate band to be resuscitated to tackle the problem of an old age taxpayer.
There is another reason why it is appropriate and correct for us to introduce a debate on the reduced rate band. After last year's debate on the Budget the then Chief Secretary gave an interview to the press in which he stated that the objective and target of the Government's tax policy was a standard rate of tax of 25p. That target is disappearing over the far horizon. In her interviews over the weekend the Prime Minister, in celebrating, if that is the appropriate word, her two years in office, stated that there was no immediate prospect of a cut in standard rate. Many of the comments in her interviews focused on the playing down of the objective of a further cut in the standard rate.
The hon. Member for Colne Valley (Mr. Wainwright) said that we should not be misled by any promises to the effect that the failure to raise tax thresholds this year may be made good. I concur with that view. I am sure that I shall carry the hon. Gentleman with me in saying that if the Government were to attempt both to make good the failure to increase tax thresholds this year and to cut the standard rate of taxation, they would be building up some extremely expensive commitments that would not tally with the forecast contained in the Red Book about the Government's future financial revenue.
We must conclude that the Chief Secretary's prospect of a 25p standard rate has disappeared over the far horizon and set with the sun. Having failed to bring within reasonable striking distance the prospect of a standard rate of 25p, I am sure that the Treasury team would not wish the Government to go down in history as the one who increased tax for the low-paid from 25p to 30p. If we cannot have a standard rate of 25p, let us at least have a reduced rate of 25p such as the Government inherited from the previous Labour Government in 1979.
Anyone who commences to pay income tax in the United Kingdom pays at the standard rate. There is only one other country where the same thing obtains—namely, Australia. Under this Government the thresholds for paying the standard rate have diminished even more sharply than the threshold for income tax itself.
As we observed in the previous debate the threshold of income tax on average earnings has fallen from 45 per cent. to 38 per cent. under the Government. When the Government came to power, those paying income tax on 45 per cent. of average earnings paid it at the reduced rate band. One had to be at 58 per cent. of average earnings to pay standard rate. Thus, within only two years, under this Government the threshold for the standard rate of income tax has fallen from 58 per cent. to 38 per cent., a staggering drop of 20 per cent. inside two years and three Budgets.
The remarkable feature of the British tax system is that virtually everyone pays the same marginal rate of taxation. Over the last two years, we have heard ad nauseam about the plight of those who pay the higher rates of taxation. It is plain from the Government's statistics that only 2 per cent. of all taxpayers pay a higher rate of taxation. Virtually everyone now pays standard rate. From an income of £27 per week to an income of £240 per week, the standard rate is 30p in the pound. If one adds national insurance contributions, the marginal rate at the bottom end of the scale of £27 is 38p in the pound.
There is a curious anomaly. Because national insurance contributions no longer go up in line with income over £200 per week there is the odd result that those who earn between £200 per week—which is where the increase in national insurance contribution ceases—and £240 per week, which is the point at which the higher rates of taxation operate—by anyone's standards, that is a comfortable income—pay a lower marginal rate of taxation, taking income tax and national insurance contributions together, than the person who has just come into the tax bracket at £27 per week.
That cannot be right. In those circumstances, it must be right to restore the reduced rate band which would provide to the person at the bottom end of the scale, with a £27 per week income, a marginal rate of taxation which is at least comparable with the marginal rate of taxation of the person who is earning £200 per week.
I shall adduce one other argument. I should like to remove from the mind of the Committee any view that the reduced rate band was a curious aberration in Britain's tax laws, which existed simply between 1977 and 1980. If one considers the rates of taxation levied as part of our income tax system, for many decades a reduced rate band was common to our tax system. Until 1963 there were no fewer than three separate reduced rates before the standard rate. Those were abolished throughout the 1960s. The last was abolished in 1969 by Mr. Roy Jenkins, who has since devoted himself to smashing the mould of British politics.

I am sorry that none of his acolytes or proselytes—I am not sure which word one should use—is here to advise us on the smashing of the mould of British politics—which includes reversing the decision taken by Mr. Jenkins in 1969 as a member of what he is now pleased to term one of the tired old parties—in abolishing the reduced rate band. It would be interesting to hear the opinion of the Social Democratic Pary on the reduced rate band, but I see that it has not favoured us with its presence.

The Chief Secretary to the Treasury (Mr. Leon Brittan): There are not many of the hon. Gentleman's hon. Friends here either.

Mr. Cook: With respect to the Chief Secretary, on a quick calculation, we have the weight of numbers on our side. If he wishes to call a snap vote to establish that, I should be happy to concur.
If I may anticipate what the Chief Secretary will say—and for his elucidation, as he was probabay not present—last year we were told that it was preferable to concentrate the money necessary to maintain the reduced rate band on raising tax thresholds. Every Chancellor who has spoken at the Dispatch Box about eliminating or abolishing a reduced rate band has said that.
However, a curious thing has happened. Between 1963, when the process of eliminating the reduced rate bands commenced, and this year, when it was completed, the tax threshold has consistently fallen. In 1963, when the task began, it was 85 per cent. of average earnings. It is now 38 per cent. It has steadily declined while Chancellors have assured us that they were eliminating reduced rate bands to free resources to increase it. I hope that we shall not hear the same old argument again tonight. Indeed, it is not open to a Government who, for the first time in a dozen years, have not increased tax thresholds by a single penny. I am intrigued to know what excuse will be offered for not restoring the reduced rate band, so I shall speedily conclude and allow the Chief Secretary to put me out of my misery.
Whatever the excuse may be, it cannot be that the Government cannot afford to bring in a reduced rate band because it is necessary to concentrate the money on raising tax thresholds. They have frozen tax thresholds and have refused to reopen the issue. The corollary to their decision not to uprate thresholds but to freeze them and to allow them to decay with inflation is that it is perfectly proper for the Committee to return to last year's debate. The Government have welshed on the bargain struck with the House when we abolished the reduced rate band to increase tax thresholds, so the Committee can properly ask for the reduced rate band to be restored. It is necessary in the interests of the low-paid taxpayer. As we clearly established—and it was not contested by the Financial Secretary—the burden on those at the bottom of the scale has increased as a direct result of the Government's failure to uprate personal allowances. We need not bandy percentages. We are entitled to ask the Government to restore a reduced rate band that will give some protection, if only partial against the increased tax burden foisted on the low-paid by the Government's fiscal policies.

Mr. Richard Wainwright: The Liberal Party fully supports the amendment. We vigorously opposed the abolition of the reduced rate in 1969 and welcomed its


return during the Lib-Lab pact in 1977. We fought last year alongside the Labour Party to resist the opportunist abolition of the reduced rate.
At least one reduced rate—and there is a case for more—is a structural part of a civilised income tax. The Government should not tamper with it, just as no sensible person would tamper with the supporting structure of his house merely because an upper room was temporarily unoccupied.
8.45 pm
The Opposition Front Bench may agree that in fighting the removal of the reduced rate last year we had on our hands not only the Treasury Bench but also some acknowledged experts on tax who at that time unfortunately fell for the argument that there was a strong case for getting rid of the reduced rate. I hope that those expert voices are now somewhat muted.
Last year, to return to my simple metaphor, the room upstairs was temporarily unoccupied and did not require much support. It could be demonstrated that with the full glory—alas, what a fleeting glory—of the Rooker-Wise amendment, most of the people coming into the reduced rate band last year would have been students and part-time workers rather than a great number of fully-occupied low-paid workers or pensioners. But that was a fleeting phenomenon. We stick to our view that that was no respectable excuse to tamper with the essential structure of income tax. Indeed, my hon. Friend the Member for Truro (Mr. Penhaligon)—he has been quoted from by the Labour Front Bench today—pointed out last year that tampering with the income tax structure in that way was an unworthy way to finance the Rooker-Wise amendment.
This year, with the total failure to index the reliefs and allowances in line with inflation, a reduced rate is desperately needed. As has been pointed out, without a reduced rate, the very low-paid and pensioners, including many thousands of women who have not yet reached the age to qualify for age allowance, will be taxed on very short commons indeed. Those are the very people who should not be subject to the appalling swipe of a 37·75p introduction to income tax and national insurance combined. It is absurd that the moment people hit the tax system they come in at the full wallop of nearly 38 per cent. on incomes as small as £28 per week gross. It is for just that type of situation that the reduced rate is needed.
I hope, too, that this year there will not be the absurd attempt to defend the abolition of the reduced rate by alleging that it is an overwhelming clerical burden on a country which has a vast array of simple calculating devices to take the chore out of this type of calculation. That struck us last year as the most unworthy argument of all. In pre-war days, when most of these operations had to be done by mental arithmetic or by a very elaborate mechanical comptometer, we supported no fewer than three lower rates of income tax before standard rate was reached. It is to suggest that civilisation is going backwards fast to say that the Inland Revenue cannot sustain the simple calculations of one reduced rate. If that argument is to be adduced, perhaps the Chief Secretary will tell us how long it will be before we have to go back to a poll tax, reverting to jungle terms, because it is all too tedious and laborious to compute individual tax liabilities.
A reduced rate is an essential part of any civilised tax system, as every other developed country, with the exception of Australia, acknowledges. It has the great virtue of introducing people to the tax system by a series of steps, just as one takes the load in a car by letting out the clutch gently.
In our view, this is a brutish tax measure which takes the country back to an uncivilised level of taxation.

Mr. Brittan: The amendment, the purpose of which is to reintroduce a lower rate of income tax below the basic rate on the first £900 of income, would cost in a full year £1,100 million. Therefore, we are not talking simply about redressing something which was done inadvertently or misguidedly last year but rather about something which has major revenue implications.
The hon. Member for Colne Valley (Mr. Wainwright) attacked the decision taken last year on the basis that it altered the structure of the income tax. With great respect to him, that is not a persuasive argument except on the basis that the structure was right. Of course it was a structural change to remove the reduced rate, but it does not follow that that was the wrong decision to take. I do not regard the structure as it existed before then as in any way sacrosanct.
With due respect to the hon. Member for Colne Valley, the repeated use of the word "civilised" with reference to a particular tax system does not in itself prove that that is the system most to be desired without reference to the objectives which the system is designed to secure. The damage to the structure need not detain the Committee for long because the structure was in no sense a perfect structure which could not be altered beneficially.

Mr. Richard Wainwright: Has the Chief Secretary any observations on the fact that every other developed country apart from Australia finds it a suitable structure to have a graduated introduction to income tax rates?

Mr. Brittan: To assess that observation I should have to look also at the extent of the allowances in all those countries. There is a very varied pattern. So I do not find persuasive either the argument of taking one element on its own and considering it without looking at the other elements.
Before coming to the thinking behind the amendment, I shall refer to the basic approach taken by the hon. Member for Edinburgh, Central (Mr. Cook). He seemed to be saying that last year we abolished the reduced rate band so as to increase the thresholds and, therefore, as there had been no increase in the thresholds this year, the lower rate should be reintroduced. I think that is not an unfair summary of his argument.
It does not follow that that is the right course to be pursued. If we cannot increase the thresholds, it does not follow that we should do something else instead. If that sum is available the right course might be to increase the thresholds. If that sum of money is not available, or there are other priorities, we should not necessarily be driven to that course merely because this year it is not possible to increase the thresholds. The argument is fallacious. It is a useful peg on which to hang a debate, but no more than a false syllogism. We have to look at the merits of the arguments a little more closely and that I propose to do.

Mr. Cook: I am happy that the Chief Secretary should look at the merits of the argument. I do not found my


arguments solely on the basis of the bargain that was struck last year between the abolition of the reduced rate band and uprating the tax thresholds. If he looks at what the Chancellor said last year he will see that it was perfectly plain that he offered the House that bargain. I would counsel him to be careful what he says about the cost of uprating. He is threatening to reopen the whole question of the principle of Rooker-Wise.
The point that persuaded many hon. Members to support the Rooker-Wise amendment in 1977 was that it is fallacy to believe that it costs the Treasury a specific sum to carry through the upratings. The reason why many hon. Members were persuaded to support the amendment was that, because of the workings of inflation it is the Treasury which receives more in money and the taxpayers who have to pay out more to the Treasury as a result of the workings of inflation. It is therefore fallacious to talk in terms of the uprating as costing a specific sum which is coming to the Treasury simply as a result of the workings of inflation.

Mr. Brittan: I am afraid that the hon. Gentleman was not listening sufficiently closely to what I was saying. I did not talk about the cost of the uprating; I talked about the cost of this amendment being £1,100 million. In that connection the hon. Gentleman might also note that the way he has just put it, with which I do not wish to enter into debate at the moment because it does not relate to this amendment, differs markedly from the way in which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) put it earlier in our deliberations, when he said that the cost of the Rooker-Wise amendment had been substantial but, as it turned out, thoroughly worthwhile. The hon. Gentleman should get together quietly later with his right hon. Friend to work out their position on that. I do not think it is necessary for that to be done for the purpose of this amendment.
This amendment, compared with what is proposed by my right hon. and learned Friend in the Budget and what appears in the Finance Bill, would mean forgoing £1,100 million of revenue. That is a substantial sum, which cannot just be dealt with in a readjustment of priorities in Committee. If the hon. Gentleman is arguing that, he is in effect reopening the entire Budget strategy; what he is saying is either that there should simply be a higher public sector borrowing requirement or that there should be an increase pro tanto in the basic rate.
I do not propose for the purposes of this amendment, as the hon. Gentleman has proposed it, to re-examine the whole Budget strategy. The Committe has had ample opportunity to debate that and will continue to do so. Similarly, I do not propose to rehearse the arguments against increasing the basic rate which my right hon. Friend the Financial Secretary touched on in the earlier debate, which raised the issue in a more central form. It is right to point out that that is the implication behind this amendment. It is in no sense trivial or minor. It is central and could not be met without one or other of those consequences.
On the administrative cost, which the hon. Member for Colne Valley rather pooh-poohed, the Committee should get the facts on the record and draw its own conclusions. I do not suggest—I very much doubt whether anyone else in my position would—that the administrative cost should be a conclusive consideration, but it is relevant. The Government aim to reduce the proportion of our resources that we spend on administration. The saving of 1,300 staff

resulting from the abolition of the lower rate band last year will contribute towards this. Re-introducing a lower rate band would also make more work for employers.
If the hon. Gentleman is talking about the structure of the tax system, simplicity is a considerable virtue when combined with administrative savings. For what it is worth, that is certainly an argument against the hon. Gentleman's proposition. The central question which this amendment exhibits is different. If the Government felt that it was appropriate to devote resources to that extent to reduce the burden of direct taxation, the question would still arise whether the best way of using those resources would be to reintroduce a lower rate band.
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I hasten to add that it is the Budget judgment, as is well known to the Committee, that those resources are not available, and that it would also be wrong instead to put up the basic rate to finance such a reduction. But if resources to that tune were available, I do not believe that the best way of using them would be to reintroduce the lower rate band, or that that would be the best way of helping those who are most disadvantaged and who are least well off, if that is the objective and if one is desirous of approaching it in that way.
Last year, the Government considered the matter carefully and decided that the best way to help those with the greatest need was to use all the available resources to increase tax thresholds by the full indexation figure. The fact that those resources are, in the Government's view, not available this year, does not alter the judgment as to the way in which they would be best used if they were available.
The introduction of the lower rate band was, of course, a well-intentioned but misdirected attempt to help the lower-paid. I remain of the view that when money is available and when it is appropriate that it should be directed in that particular way, it is far better to raise tax thresholds. The reason is that an increase in the tax threshold would take some people out of tax entirely, and that would be an extremely beneficial thing to do. It is regrettable that our assessment of the resources did not make that possible this year, but I would rather do that than to introduce a lower rate.
I do not believe that the Opposition, were they in a position to implement their wishes, would seriously, pound for pound, prefer to introduce a lower rate band rather than to increase the threshold by a greater amount than would otherwise be possible. For any given sum that is available in this way, there must be a trade-off o f one against the other. [Interruption.] The hon. Member for Grimsby (Mr. Mitchell), who raises these matters from a sedentary position, can well see that, for any given expenditure or forgoing of expenditure, one must decide either to devote the whole of it to increasing the threshold or to divide it up between increasing the threshold and introducing a reduced rate. There is another possibility, and that is to spend all of it on a reduced rate.
The amendment seeks to spend, on a reduced rate, all of the sum that we think is not available. Apart from the fact that increasing the threshold has the advantage of taking some people out of tax entirely, an increase in threshold gives the greatest benefits to those at the bottom of the income scale, and a lower rate band is least effective for those people, because people in the lower rate band get less benefit from it than people paying tax at the basic rate.
Therefore, even if one could give effect to the objective for which the Opposition argue, this would not be the best way of doing it. I do not believe that reintroducing the lower rate band would, in addition, substantially improve work incentives for the lower-paid. There is no good evidence for supposing that that would be the case. We are talking about a difference between a 25 per cent. and a 30 per cent. marginal rate and, as has been said, few of those concerned would be full-time adult workers, so I do not think that the incentive effect would be substantial or impressive.
When I hear Labour Members say that they hope that this, that or the other argument will not be used again, what they are saying, in effect, is that it is an argument that is used repeatedly and is unanswerable. Although tabling the amendment may provide a useful peg for reopening many old arguments and dealing with the issues which have already been canvassed in the debate today, the reality is that, if we could forgo £1,100 million, I would not be able to advise the House that the best way to use that money would be to reintroduce the lower rate.
Nothing that either hon. Gentleman has said persuades me that that is so. I would dearly like to be able, with that sort of money available for that purpose, to increase threshold allowances. That would be a better way of spending the money. Sad to say, that is not possible. I do not regard the Opposition's alternative as preferable, even if money on that scale were available. Basically the House will appreciate that it is a theoretical argument. I do not accept that money on that scale is available. For those reasons I advise the Committee to reject the amendment.

Mr. Bob Cryer: The Minister has put forward predictable arguments that he has read from his brief. He says that in his view the alternatives are either to reduce the rate band or to lift people out of tax. We know from our discussion on an earlier amendment that the Rooker-Wise arrangement—for which the Conservatives voted during the period of the Labour Government of 1977—has been removed. Thus, that is not an alternative. The further reform in the amendment is not suggested as an alternative. The lifting of people in the lower income bands out of tax is not accepted by the Government. It has been rejected because the Government are marshalling their troops into the Lobby against the low wage and salary earners.
The Minister has said that the proposal in the amendment to introduce a lower rate band of 25 per cent. would cost £1·1 billion. That is a modest sum in relation to the incentive that it would give to lower wage and salary earners. The Minister has said that there is unlikely to be an incentive. I find it curious that Government spokesmen always deny the effect of incentives on low wage earners and always emphasise the effect of incentives on the higher income earners. When the Conservatives came into office, they said that the only way the economy could be turned round was by giving incentives to wealthy entrepreneurs so that they could produce jobs that would set the economy moving. The Government did not set a time for the stage to be reached when the economy would start moving again, but they claimed that their Budget was a Budget of incentives. That plainly has not happened, even though the Government gave lavish tax concessions to the rich.
The argument they used was that incentives were necessary. The Minister would not deny that incentives are necessary. He would argue that the incentives that the Government gave two years ago, while they are not now working through the economy, will work through at some indeterminate stage. If their view of life for the rich is that incentives are necessary, why is their view of life different for those in the lower income bracket? If people are given the option of going into a tax bracket or paying 25 per cent., they would prefer not to go into a tax bracket, but they are denied that option. Given the option of paying 20, 25, 30 or 35 per cent., most people would choose to pay the lowest amount of tax.

Mr. Tristan Garel-Jones: Hear, hear.

Mr. Cryer: The hon. Gentleman, who has just drifted into the Chamber, supports my claim.
The Opposition's amendment suggests that those on low incomes would benefit from a 25 per cent. band for those entering the tax bracket for the first time. It would give a marginal form of incentive and would encourage people.
The principle that has been lost sight of is that income tax is supposed to be progressive. Those who earn high incomes are supposed to pay more than those on low incomes. The Government have succeeded in reversing that position. They have taken those on high incomes out of the tax net in many respects and have reduced their tax burden. They have shifted the burden of tax on to indirect taxation. As a result, they gain a greater proportion of tax from the lower income groups than from the middle and higher tax-paying groups. The rejection of the 25 per cent. rate band is a direct rejection of the progressive principle of taxation, that those who earn more are more able to pay tax and should make a greater contribution to the nation's revenue.
Deliberately, with malice aforethought, the Government are placing a greater tax burden on those least able to bear it. Parliament should continually send out the message that the Conservative Party won the general election by a confidence trick. It said that it would put more money into peoples' pockets by reducing taxation, yet it has reversed the position. At the last general election, every Conservative candidate lied to the electorate. There can be no dispute about that, because in every way the tax burden has been increased, except for those in the top bracket. There was a lower bracket of 25 per cent. for those first entering the tax net. The Government now reject the idea of its reintroduction.

Mr. William Hamilton: Not only do the Tory Government practise such principles, but the Prime Minister went into a City pulpit and said that it was the height of Christian virtue to take from the poor and give to the rich.

Mr. Cryer: My hon. Friend is right. After the speech which the Prime Minister made two years ago yesterday—black Thursday—we have come to expect a reversal of position. She said that she would produce harmony, but she has produced strife and bitterness which are more deeply felt as the weeks pass.
Together with the abolition of the Rooker-Wise amendment, £1·1 billion is being removed from the economy. As a result, between £3·5 billion and £4 billion is being taken out of the economy. The clause means that


£1·1 billion will be taken from those least able to afford it. Consequently, there will be an increase in unemployment. If money is taken out of the economy, demand will be reduced. A decline in demand means that fewer goods and services are desired, which in turn entails further factory closures.
The Government have consciously taken this action. They are using unemployment as part of their social and economic policy. They claim that they want to reduce inflation. They say that they must, therefore, reduce the amount of money circulating in the economy. That is patently untrue. In the past few months, the rate of inflation has dropped a few points but the amount of money in circulation has increased month by month. The Government's practice is at odds with their theory. In addition, they know that unemployment is a weapon that they can use against the trade union movement. They hate and detest the organised trade union movement—they cannot work with it—and they have introduced legislation to try to diminish its effective force. The Government regard unemployment as a weapon which they can use. They turn on tears of sympathy, but we know that they are the Conservative Party described by Disraeli—organised hypocrisy.
9.15 pm
The reduction of £1·1 billion is an example of low wage earners being penalised because of the Government's vindictive attitude. The Government say that there is no money to allow for the £1·1 billion. That is nonsense, because if the Government had the political will they would find the money. They would find £1·1 billion for defence. When they have a political objective, they find the resources. There is money available, but the Government's political will is opposed to putting money into people's pockets, particularly the pockets of people on low incomes, through tax concessions.
Bearing in mind that there will be local elections on Thursday, the message must go out that the Government have reneged on almost every promise that they made, they deliberately misled the public before the election and they are now exploiting those who can least afford to pay.
Because of the range of benefits that are being diminished by the Government, those who do not enter the tax bracket are also facing hardship and suffering. As earnings-related benefits diminish this year and end next year, people are learning that the Government have stealthily been eroding benefits. It behoves the public to bear those factors in mind in the local elections, because, although there are important local government matters to take into account, the elections will allow voters to register their opposition to the Government's policies.
The Chief Secretary said that there were administrative difficulties but they were not insuperable and that the reduction in administrative costs meant that 1,300 staff were saved. By "saved" the Chief Secretary means that the Government got rid—perhaps not directly, but through early retirement or redeployment—of 1,300 staff. The fact that applying a 25 per cent. rate band would produce a fairer society and enable people to feel that the distribution of wealth in our society was being applied on a slightly fairer basis does not matter to this wretched Government. It is more important to them that they are able to sack 1,300 civil servants.
It is hardly surprising, when the Chief Secretary makes such announcements, that the Government should be in

dispute with the Civil Service and are losing revenue because they are adopting an intransigent attitude towards the Civil Service. Civil servants—and I am talking not about the senior civil servants who are close to Ministers, but about civil servants such as those who administer the tax system throughout the country and the DHSS services which are so crucial for so many beneficiaries—know that they are facing an end to their careers.
Youngsters leaving school no longer have the wider range of opportunities that existed under the Labour Government. The Government are cutting back. The notion that there should be some administrative machinery to achieve a more progressive income tax system does not interest the Government. Their attitude is coupled with a determination to place more people on the dole. At a time when 2½ million people are already on the dole, the Minister boasts of administrative savings achieved at a cost of 1,300 jobs. This occurs time after time. No one outside should be fooled into believing that the Conservatives are concerned about unemployment, apart from one or two Members who see their marginal seats disappearing rapidly before their eyes.
This is as hard-hearted and vicious a Government as the nation has ever seen. Everyone remembers the election pledges given by the Conservatives in 1979—the tax concessions that would be made, the greater amount of money to be left in people's pockets and the freedom of choice, all rolled out and wrapped up in the words of Saatchi and Saatchi and put before the electorate with the claim "Labour isn't working". What a lie those words, advertised on great posters, have proved.
The Conservatives did not say that they would add 1½ million people to the dole queues or that they would bring about a more unfair tax system in which the lowest income tax band would be abolished and another 1,300 people would be put on the dole. That was not the message in those heady, public relations days. However, people now understand the position. There are marchers bearing the same colours and carrying similar banners to those that featured in the famous Jarrow march, heading for London to demonstrate that people are not prepared to accept the vicious, hard-hearted face of Conservative Governments and their doctrinaire adherence to bolstering capitalism and their rich friends while adopting a harsh and vicious approach towards those in the lower income bracket. Things will change, and the sooner the better.
In the meantime, the Government could give a ray of hope by allowing this modest amendment to be passed. Of course, that will not happen. The Government have set their hearts—or, I should say, their calculating machines—against giving relief to people on low incomes. They are determined to carry through their wretched policies. The sooner a general election takes place, the sooner we shall see a fairer and more progressive tax system imposed.
The amendment is a tiny and modest step towards a more progressive tax system, based on income. It is a move away from a system of taxation that is additional to income tax but falls more heavily than income tax on the shoulders of people on lower incomes. I do not know what the clarets and blues, those who betrayed the Labour Party, will be doing. I am sure, however, that my steadfast colleagues in the Labour Party will vote for the amendment to restore the situation, decimated by Conservative policies, to that which existed under the Labour Government.

Mr. Woolmer: First, I want to say a word about the failure earlier to support the proposal to uprate personal allowances. I mention that because the amendment now under consideration is, in part, an attempt to make good some of the damage done by that decision to the lower-paid and lower income families and households. Unfortunately, Ministers spoke against that proposal, and it is interesting to consider the balance of feeling reflected in their speeches. I shall attempt to show the relevance of that balance in speaking to the present amendment, which seeks to introduce a lower tax band of 25p in the pound.
The Government argument was that a higher burden of taxation should be imposed on the populace, a proposition with which I do not agree. They argued that more taxation should be levied on people, and that the best way to do that was by not uprating the personal allowance. The alternative that Ministers were considering at that time was 3p on the standard rate of tax. I said that that showed a conscious decision that the relative burden of taxation should fall more heavily on the lower-paid than on the higher-paid. It was a conscious decision. It was not something that had not occurred to the Government. They decided that the balance of the higher burden of taxation could be better borne by the lower and average paid than it could be by the higher-paid.
That decision will help us understand this proposition, which seeks to argue—here I entirely agree with my hon. Friend the Member for Keighley (Mr. Cryer)—that the British people have a strong sense of fairness when it comes to taxation and the political system. It is understood and agreed that the person earning £50 to £60 a week should not pay the same marginal taxation as the person earning £200 or £300 a week. To most people, that is a fair proposition. It would not be considered fair by most people if the person earning £50 or £60 per week paid the same marginal rate of taxation—38 per cent. effective marginal rate of taxation, or 38p in every extra pound—as the person earning £200 or £300 a week.
Last year the Government undoubtedly introduced an element of unfairness into the tax system. This amendment is a modest proposition which seeks to introduce a notion of fairness.
There is the other matter of incentives. The Government believe that it is necessary for highly paid people—extremely wealthy people—to have more incentives to work, through cuts in the highest rates of tax which are paid only by those who earn high incomes. They seek to change the laws on wealth so that people who are already wealthy pay less taxation. The Government believe that it is more important to provide more incentives for the already rich and wealthy, while people at the bottom of the midden have to put up with a high marginal rate of taxation.
I was appalled to hear the Financial Secretary to the Treasury try to excuse the poverty trap by saying that it did not take effect for a few weeks or months. That was the most disgraceful view that I have ever heard expressed by the Government Front Bench.

Mr. Cook: My hon. Friend will recall that the right hon. Gentleman was the member of the Government who, when challenged on the invention of the 54-week year for the uprating of the pension, responded that he would not cavil over a fortnight.

Mr. Woolmer: My hon. Friend is quite right. It is not unfair to say that many Conservative supporters can afford to ignore a fortnight's pay. That may be because, under their methods of assessment, they do not have to pay tax until the year after. They do not appreciate what life is like for those on the level of income that is caught in the poverty trap.
I have heard Conservative Members say that the Labour Party is not the only party with a conscience or the only party that cares. But to say that the poverty trap does not take effect for a few months, and to excuse it on that basis, is a despicable remark which is not worthy of the right hon. Gentleman.
The lower-paid appear not to respond to incentives or to the opportunity to have a low marginal rate of taxation. In some ways, a man or woman earning £50 a week does not mind if he or she is paying 38p in the pound, whereas someone on £200 a week does.
Perhaps the Chief Secretary will explain why a person on £300 or £400 a week needs lop off the marginal rate of tax, whereas a person on £50 or £60 a week does not need 5p or lop off the marginal rate. As many of my hon. Friends would say, it is either a class view of society or it is simply a view of society by people who do not understand or do not care what it is like to be on £50 or £60 a week. I leave hon. Members to choose, but I can honestly say that I found the arguments advanced earlier totally at odds with the kind of people whom I know.
We know that in part some of the elements of the Government's package of incentives are a load of codswallop. Most people in my constituency simply want the opportunity to get a job. In the town of Batley, which has 25 per cent. male unemployment, many men would give their left or right arm for a job. When they are told about incentives, it raises not merely a wry smile but also a sense of anger.

Mr. Cryer: Does not my right hon. Friend accept that by robbing lower income earners of £1·1 billion by rejecting this amendment, thereby introducing a further deflationary element, the Government will put more people in the dole queues? The result will be that more unemployment benefit will have to be paid, and that will swell the PSBR—already about £8 billion a year—and sustain the massive number of unemployed which the Government are increasing as a result of this Budget.

Mr. Brittan: indicated dissent.

Mr. Woolmer: The right hon. and learned Gentleman chooses to disagree, but I entirely agree with my hon. Friend. Even the Yorkshire chambers of commerce and industry—normally the natural supporters of the Conservatives—are calling for reflation. They know that they could produce things and that the labour and machinery are available. However, the markets are simply not available because the Government have chosen to deflate the economy. But business men know that the Government are deflating the economy into a deeper recession.
Those are the two substantial points that I wanted to make. I should also like to stress the need to consider the whole question of the progressiveness of our tax system. People in Britain have a sense of fairness. Any future Government will have to look at the progressiveness and


fairness, not only of the direct tax system but of the indirect tax system. I suspect that the indirect tax system of nil or 15 per cent. VAT with some odds and bods of historical accidents in Excise duties is long past the time for consideration. The Government's latest introduction of a regressive indirect tax on gas has increased the problem of the burden on the lower-paid that we seek to reduce.
I hope that there is a presumption in the Committee that the lower-paid have as much right to fair consideration as the higher-paid and they have as much right to be asked to respond to incentives. I hope that the Government will feel able to move at least some small way towards redressing the undoubted penalty that their refusal to uprate personal allowances and provide minimal assistance has imposed on the lower-paid in our society.

Mr. Austin Mitchell: I am a little disappointed by the Minister's reply to a debate that is still to come. He made the basic mistake of trotting out the lame, standard Treasury argument against all changes beneficial to the less well-off. He appears to be following his earlier basic mistake of giving far too many hostages to fortune about the recovery of the economy. A new Minister in his position should have distanced himself from the mess that he inherited. Instead, he is plunging wholeheartedly into the mess and saying that things will get better when manifestly they will not do so. That is a serious mistake in the career of such an exceptionally able man.

Mr. William Hamilton: Do not kid yourself.

Mr. Mitchell: That will probably be proved wrong as night follows day, but we shall have to wait and see. The Minister's argument was that of a bankrupt debating whether to give £1,000 to charity or to spend £900 on booze. He was hairsplitting about the morality of one as opposed to the other when he could, in fact, do neither. He was rather like a eunuch deciding whether he preferred blondes or brunettes—[Interruption.] I apologise for my sexist remark about eunuchs.
The Government have said, "We will not introduce the reduced rate band because it is not the best method of helping the less well-off. We cannot adopt the best method because we have made such a disastrous financial mess. Therefore, we will do neither and use the arguments for the one to snipe at the other."
Last year the Government abolished the reduced rate band. They justified that by the increase in the allowances. Having failed to increase the allowances this year, it surely is incumbent upon them to take the concomitant step of reintroducing the reduced rate band to help those who will be seriously hit. That would be less expensive than increasing the allowances. The hair-splitting argument about which is best as a preface to rejecting both is a pointless approach to the entire subject. Why cannot the Government do what the previous Labour Government did in 1978—namely, to increase the allowances and to introduce a reduced rate band?
The Government's attitude toward tax is to help not the less well-off, not those most in need, but the 2 per cent. of top taxpayers who do most of the moaning and from whom the chorus of rumbling and complaints comes in its most vociferous form. It is not the Government's policy to help the mass of the people who are most severely hit.
There is a strong case for spending the £1,100 million that this measure would cost as it would reduce the deflationary impact of a severely deflationary Budget

which will severely and adversely affect an already contracting economy. That is an economic argument. The social argument is a step towards a more graduated tax system. We should all favour progress towards such a system.

Mr. George Grant: I think that my hon. Friend is being rather too kind in his approach. He has been talking about the economic approach to the problem but our main consideration should be the political approach. Does my hon. Friend recall that at the general election in 1979 the Tories promised to reduce taxes`? That was one of their main planks. The surtax payers' liability was reduced from 83 per cent. to 59 per cent. At the same time value added tax was doubled. This is the real argument. This is what it is all about.

Mr. Mitchell: I am grateful to my hon. Friend for his intervention, which emphasises the role of the Conservative Party. It is the party that believes in the principle, "To him that hath shall be given, given and given and we shall take from those who have not by devious manoeuvres such as failing to increase the allowances and failing to reintroduce a reduced rate band."
There was a reduced rate band for much of the period before the war. That continued after the war and reached its height in 1952–53, when it progressed from 2s 6d to 5s and to 7s, the standard rate being 9s in the pound. There were bands of income of about £100 at that stage. Such an approach is a beneficial step towards a graduated system which would follow major precedents overseas. For example, the American graduated system is based on self-assessment. A system of graduation would ease the pain of taxation and make the whole system more effective arid efficient. It is possible with computerisation and it was possible before computers were introduced.
Secondly, such a system would ease the poverty trap. The Government have made it deeper still—and wider still and wider shall the trap be set—by the efforts of the previous two Budgets. We should not try to eliminate consequences of the trap by reducing benefits. We must ease the steep introduction of taxation. We have an extremely high starting rate which is applied at a low level. That is surely the worst feature of our tax system rather than the reliefs for the better-off for which the Government are always claiming credit.
Acceptance of the amendment would have the virtue of easing the poverty trap, which is one of the blots on our social system and our tax system. How can it be right to have such heavy marginal rates for those least able to afford them? Families with dependent children, in which only one parent is working, usually on low wages, are crippled by the present system. At a weekly income of £41·25, one begins to pay income tax at 30 per cent. on extra earnings. That is iniquitous, particularly in the light of what the Government have given to the well-off.
9.45 pm
In the range of earnings from about £50 to £68 a week, taking the tax with the loss of benefits, the effective marginal rate tax is 107 per cent., which is ludicrous for the poor. It has been calculated that, between £50 and £74 a week, any sustained increase in pay leaves the family worse off. A typical wage earner is no better off earning £90 than £50 a week in that poverty trap. Surely that is ludicrous.
It will take much time, effort and detailed provision to eliminate that blot entirely from our social system.


However, we can take a minor step towards it by adopting the proposal of a reduced rate band. We should take that step. I hope that Conservative Members who are concerned about the fate of the less-well-off who are faced with the Government's economic policies, will support us in the Lobby by voting for the amendment.

Mr. Cook: I hope that my colleagues who have participated in the debate will forgive me if, in the interest of time, I do not comment in detail on their helpful and constructive speeches. In my response to the debate, I should like to return to the one speech in the debate which was dissonant from the general support for the restoration of the reduced rate band—that of the Chief Secretary, who, as my hon. Friend the Member for Grimsby (Mr. Mitchell) reminded us, is plainly an unreconstructed monetarist when revisionism is breaking out all around him.
The Chief Secretary was kind enough to say that I had amused him when I said that I feared that we would hear the old arguments. I hope that it will raise the general hilarity in his office if I assure him that there was nothing original in this year's Treasury brief. The only argument which we did not hear this year which we heard last year was that which was assiduously peddled, that the reduced rate band did not help the poor because the poor could not afford to take a badly paid job.
We have heard the rest of the arguments. We heard the argument about administrative costs from the hon. Member for Colne Valley (Mr. Wainwright). I cheerfully admit to the Chief Secretary that there is a certain tension between simplicity and equity. The easiest tax administered which involves the fewest civil servants would be a poll tax. It would also be the unfairest. As my hon. Friend the Member for Blackburn (Mr. Straw) reminds me, he has returned to the House fresh from celebrating the 600th anniversary of the peasants' revolt. [Interruption.]
As the hon. Member for Yarmouth (Mr. Fell) has chosen to grace us with his presence and to intervene to say that we are being funny, I assure him that I am not being funny. I shall give way in a moment to the hon. Member. I would not pass up the opportunity so lightly as we so rarely hear his dulcet tones. I am not being funny.
A poll tax gave rise to a peasants' revolt 600 years ago. I do not believe that it is improper or in any way extravagant to say that the increasing burden of taxation on the low-paid created by the Government will give rise to intolerable social pressure on our political fabric, which will be difficult to withstand when the same Government have thrown 2½ million people on the streets with nothing to do other than revolt.

Mr. Anthony Fell: I was not referring to the hon. Gentleman. I would not bother.

Mr. Cook: It is rare for the hon. Gentleman to grace us with his presence at this hour. We are deeply flattered that he has chosen to attend our debate. I am glad that he does not believe that the argument is funny. It is important.
The Chief Secretary's second argument—that the reduced rate band has no incentive effect—was also rehearsed last year. I share the bewilderment of my hon. Friend the Member for Batley and Morley (Mr. Woolmer). Why is it an incentive to cut the marginal rate of taxation

for the highly-paid but no disincentive to increase the marginal rate of taxation for the low-paid? That paradox is never explained when the Treasury simultaneously cuts the marginal rate of taxation for the highly-paid and proposes increases in the marginal rate of tax for the low-paid.
The Chief Secretary said that the reduced rate band mainly affected part-time workers, so the incentive argument did not apply. If I may risk using a technical term to the Chief Secretary, the labour supply is more elastic with part-time workers. Surveys confirm that a part-time worker is more likely to be discouraged from work by a financial or tax disincentive. If we are to pay regard to the incentive—disincentive argument, it applies with greater force to the part-time worker.
I rashly predicted that we should not hear again the argument that it is preferable to concentrate the resources on raising tax thresholds. I was confident that a Government who had failed to raise tax thresholds would not resort to it, but, confound it, we had that argument as well. The Government argued that it would be better to concentrate on raising tax thresholds, even though in the Bill they have plainly abandoned any attempt to do so.
I accept that the cost of restoring the reduced rate band would be high. The Chief Secretary was good enough to acknowledge that the amendment was not trivial. It is no part of my case that it is. It is important and will cost money. As I said when I introduced it, in the vote on the last amendment the Treasury took for itself a further £2 billion of the public's money, so it is not unreasonable to suggest that half that money should be clawed back to mitigate the social consequence of the third uprating of tax thresholds. The argument for abolishing the reduced rate band last year was that those who benefited from it would benefit more from uprating the tax thresholds. They are also the people who will suffer most when tax thresholds are not increased, so some compensation should be found for the people who will suffer most from the vote earlier tonight.
During the election the Conservatives were fond of contrasting what we had done about tax with what they planned to do. The contrast that emerges from this debate is plain. In 1978 we uprated tax thresholds in line with inflation. We also introduced and maintained a reduced rate band. In 1981 the Government tell us that they can do neither. That is the contrast. The Chief Secretary was willing to have an academic debate about which would be preferable if the Government could afford to do either. The House should not go in for that sort of academic debate. We are responsible for choosing between the options.
The Government have excluded the option of upgrading the tax thresholds. We did not do so. As that option has been excluded, the House should have the opportunity to vote on the alternative option and to see whether the Conservative Back Benchers are prepared to vote to defend the Government when they wish to increase the marginal rate of tax for the poorest taxpayers, as they did in the previous vote to defend them in lowering tax thresholds.

Question put, That the amendment be made:—

The Committee divided: Ayes 247, Noes 293.

Division No. 171]
[9.55 pm


AYES


Abse, Leo
Archer, Rt Hon Peter


Adams, Allen
Ashley, Rt Hon Jack


Anderson, Donald
Ashton, Joe






Barnett, Guy (Greenwich)
Ginsburg, David


Barnett, Rt Hon Joel (H'wd)
Golding, John


Beith, A. J.
Gourlay, Harry


Benn, Rt Hon A. Wedgwood
Graham, Ted


Bennett, Andrew(St'kp't N)
Grant, George (Morpeth)


Bidwell, Sydney
Grant, John (Islington C)


Booth, Rt Hon Albert
Hamilton, James (Bothwell)


Boothroyd, Miss Betty
Hamilton, W. W. (C'tral Fife)


Bottomley, Rt Hon A.(M'b'ro)
Hardy, Peter


Bradley, Tom
Harrison, Rt Hon Walter


Bray, Dr Jeremy
Hart, Rt Hon Dame Judith


Brocklebank-Fowler, C.
Hattersley, Rt Hon Roy


Brown, Hugh D. (Provan)
Haynes, Frank


Brown, R. C. (N'castle W)
Healey, Rt Hon Denis


Brown, Ron (E'burgh, Leith)
Heffer, Eric S.


Brown, Ronald W. (H'ckn'y S)
Hogg, N. (E Dunb't'nshire)


Buchan, Norman
Holland, S. (L'b'th, Vauxh'll)


Callaghan, Jim (Midd't'n &amp; P)
Home Robertson, John


Campbell, Ian
Homewood, William


Campbell-Savours, Dale
Hooley, Frank


Canavan, Dennis
Horam, John


Carmichael, Neil
Howells, Geraint


Carter-Jones, Lewis
Huckfield, Les


Cartwright, John
Hudson Davies, Gwilym E.


Clark, Dr David (S Shields)
Hughes, Robert (Aberdeen N)


Cocks, Rt Hon M. (B'stol S)
Hughes, Roy (Newport)


Cohen, Stanley
Janner, Hon Greville


Coleman, Donald
Jay, Rt Hon Douglas


Conlan, Bernard
John, Brynmor


Cook, Robin F.
Johnson, Walter (Derby S)


Cowans, Harry
Johnston, Russell (Inverness)


Cox, T. (W'dsw'th, Toot'g)
Jones, Rt Hon Alec (Rh'dda)


Craigen, J. M.
Jones, Barry (East Flint)


Crawshaw, Richard
Jones, Dan (Burnley)


Crowther, J. S.
Kerr, Russell


Cryer, Bob
Kilroy-Silk, Robert


Cunliffe, Lawrence
Kinnock, Neil


Cunningham, G. (Islington S)
Lambie, David


Cunningham, Dr J. (W'h'n)
Lamborn, Harry


Dalyell, Tam
Lamond, James


Davidson, Arthur
Leadbitter, Ted


Davies, Ifor (Gower)
Leighton, Ronald


Davis, Clinton (Hackney C)
Lestor, Miss Joan


Davis, T. (B'ham, Stechf'd)
Lewis, Arthur (N'ham NW)


Deakins, Eric
Lewis, Ron (Carlisle)


Dempsey, James
Litherland, Robert


Dewar, Donald
Lofthouse, Geoffrey


Dixon, Donald
Lyon, Alexander (York)


Dobson, Frank
Lyons, Edward (Bradf'd W)


Dormand, Jack
Mabon, Rt Hon Dr J. Dickson


Douglas-Mann, Bruce
McCartney, Hugh


Dubs, Alfred
McDonald, Dr Oonagh


Duffy, A. E. P.
McElhone, Frank


Dunn, James A.
McGuire, Michael (Ince)


Dunwoody, Hon Mrs G.
McKay, Allen (Penistone)


Eadie, Alex
McKelvey, William


Eastham, Ken
MacKenzie, Rt Hon Gregor


Edwards, R. (W'hampt'n S E)
Maclennan, Robert


Ellis, Tom (Wrexham)
McMahon, Andrew


English, Michael
McNally, Thomas


Ennals, Rt Hon David
McNamara, Kevin


Evans, Ioan (Aberdare)
McTaggart, Robert


Evans, John (Newton)
McWilliam, John


Ewing, Harry
Magee, Bryan


Faulds, Andrew
Marshall, D(G'gow S'ton)


Field, Frank
Marshall, Dr Edmund (Goole)


Fitch, Alan
Marshall, Jim (Leicester S)


Flannery, Martin
Martin, M(G'gow S'burn)


Fletcher, Raymond (Ilkestdn)
Mason, Rt Hon Roy


Fletcher, Ted (Darlington)
Maxton, John


Foot, Rt Hon Michael
Maynard, Miss Joan


Ford, Ben
Meacher, Michael


Forrester, John
Mellish, Rt Hon Robert


Foster, Derek
Mikardo, Ian


Foulkes, George
Millan, Rt Hon Bruce


Fraser, J. (Lamb'th, N'w'd)
Miller, Dr M. S. (E Kilbride)


Garrett, John (Norwich S)
Mitchell, Austin (Grimsby)


Garrett, W. E. (Wallsend)
Mitchell, R. C. (Soton Itchen)


George, Bruce
Morris, Rt Hon A. (W'shawe)


Gilbert, Rt Hon Dr John
Morris, Rt Hon C. (O'shaw)





Morris, Rt Hon J. (Aberavon)
Snape, Peter


Morton, George
Soley, Clive


Moyle, Rt Hon Roland
Spearing, Nigel


Mulley, Rt Hon Frederick
Spriggs, Leslie


Newens, Stanley
Stallard, A. W.


Oakes, Rt Hon Gordon
Stewart, Rt Hon D. (W Isles)


Ogden, Eric
Stoddart, David


O'Halloran, Michael
Stott, Roger


O'Neill, Martin
Strang, Gavin


Palmer, Arthur
Straw, Jack


Parker, John
Summerskill, Hon Dr Shirley


Parry, Robert
Thomas, Dafydd (Merioneth)


Pavitt, Laurie
Thomas, Jeffrey (Abertillery)


Pendry, Tom
Thomas, Mike (Newcastle E)


Penhaligon, David
Thomas, Dr R.(Carmarthen)


Powell, Raymond (Ogmore)
Thorne, Stan (Preston South)


Prescott, John
Tilley, John


Price, C. (Lewisham W)
Tinn, James


Race, Reg
Torney, Tom


Rees, Rt Hon M (Leeds S)
Urwin, Rt Hon Tom


Richardson, Jo
Varley, Rt Hon Eric G.


Roberts, Albert (Normanton)
Wainwright, R.(Colne V)


Roberts, Allan (Bootle)
Walker, Rt Hon H.(D'caster)


Roberts, Ernest (Hackney N)
Weetch, Ken


Roberts, Gwilym (Cannock)
Welsh, Michael


Robertson, George
White, J. (G'gow Pollok)


Robinson, G. (Coventry NW)
Wigley, Dafydd


Rodgers, Rt Hon William
Willey, Rt Hon Frederick


Rooker, J. W.
Williams, Rt Hon A.(S'sea W)


Roper, John
Williams, Sir T.(W'ton)


Ross, Ernest (Dundee West)
Wilson, Gordon (Dundee E)


Rowlands, Ted
Wilson, Rt Hon Sir H.(H'ton)


Ryman, John
Wilson, William (C'try SE)


Sandelson, Neville
Winnick, David


Sever, John
Woolmer, Kenneth


Sheerman, Barry
Wrigglesworth, Ian


Sheldon, Rt Hon R.
Wright, Sheila


Shore, Rt Hon Peter
Young, David (Bolton E)


Short, Mrs Renée



Silkin, Rt Hon J. (Deptford)
Tellers for the Ayes:


Silkin, Rt Hon S. C. (Dulwich)
Mr. Joseph Dean and


Skinner, Dennis
Mr. Frank R. White.


Smith, Rt Hon J. (N Lanark)





NOES


Adley, Robert
Brittan, Leon


Aitken, Jonathan
Brooke, Hon Peter


Alexander, Richard
Brotherton, Michael


Alison, Michael
Brown, Michael(Brigg &amp; Sc'n)


Amery, Rt Hon Julian
Browne, John (Winchester)


Ancram, Michael
Bruce-Gardyne, John


Arnold, Tom
Bryan, Sir Paul


Aspinwall, Jack
Buchanan-Smith, Alick


Atkins, Robert(Preston N)
Buck, Antony


Atkinson, David (B'm'th.E)
Budgen, Nick


Baker, Kenneth(St.M'bone)
Bulmer, Esmond


Baker, Nicholas (N Dorset)
Burden, Sir Frederick


Banks, Robert
Butcher, John


Beaumont-Dark, Anthony
Butler, Hon Adam


Bell, Sir Ronald
Cadbury, Jocelyn


Bendall, Vivian
Carlisle, John (Luton West)


Bennett, Sir Frederic (T'bay)
Carlisle, Kenneth (Lincoln)


Benyon, Thomas (A'don)
Carlisle, Rt Hon M. (R'c'n)


Benyon, W. (Buckingham)
Chalker, Mrs. Lynda


Berry, Hon Anthony
Chapman, Sydney


Best, Keith
Churchill, W. S.


Bevan, David Gilroy
Clark, Hon A. (Plym'th, S'n)


Biffen, Rt Hon John
Clark, Sir W. (Croydon S)


Biggs-Davison, John
Clarke, Kenneth (Rushcliffe)


Blackburn, John
Clegg, Sir Walter


Blaker, Peter
Cockeram, Eric


Body, Richard
Cope, John


Bonsor, Sir Nicholas
Cormack, Patrick


Boscawen, Hon Robert
Corrie, John


Bottomley, Peter (W'wich W)
Costain, Sir Albert


Bowden, Andrew
Cranborne, Viscount


Boyson, Dr Rhodes
Critchley, Julian


Braine, Sir Bernard
Crouch, David


Bright, Graham
Dean, Paul (North Somerset)


Brinton, Tim
Dickens, Geoffrey






Dorrell, Stephen
Lester, Jim (Beeston)


Douglas-Hamilton, Lord J.
Lewis, Kenneth (Rutland)


Dover, Denshore
Lloyd, Ian (Havant &amp; W'loo)


du Cann, Rt Hon Edward
Lloyd, Peter (Fareham)


Dunn, Robert (Dartford)
Loveridge, John


Durant, Tony
Luce, Richard


Dykes, Hugh
Lyell, Nicholas 


Eden, Rt Hon Sir John
McCrindle, Robert


Edwards, Rt Hon N. (P'broke)
Macfarlane, Neil


Eggar, Tim
MacGregor, John


Elliott, Sir William
MacKay, John (Argyll)


Eyre, Reginald
Macmillan, Rt Hon M.


Fairbalrn, Nicholas
McNair-Wilson, M. (N'bury)


Fairgrieve, Russell
McNair-Wilson, P. (New F'st)


Faith, Mrs Sheila
McQuarrie, Albert


Farr, John
Madel, David


Fell, Anthony
Major, John


Fenner, Mrs Peggy
Marland, Paul


Fisher, Sir Nigel
Marlow, Tony


Fletcher, A. (Ed'nb'gh N)
Marshall, Michael (Arundel)


Fletcher-Cooke, Sir Charles
Marten, Neil (Banbury)


Fookes, Miss Janet
Mather, Carol


Forman, Nigel
Maude, Rt Hon Sir Angus


Fowler, Rt Hon Norman
Mawby, Ray


Fox, Marcus
Mawhinney, Dr Brian


Fraser, Peter (South Angus)
Maxwell-Hyslop, Robin


Gardiner, George (Reigate)
Mayhew, Patrick


Garel-Jones, Tristan
Mellor, David


Glyn, Dr Alan
Meyer, Sir Anthony


Goodhart, Philip
Miller, Hal (B'grove)


Goodhew, Victor
Mills, Iain (Meriden)
 
Gorst, John
Mills, Peter (West Devon)


Gow, Ian
Miscampbell, Norman


Gower, Sir Raymond
Mitchell, David (Basingstoke)


Grant, Anthony (Harrow C)
Moate, Roger


Gray, Hamish
Monro, Hector


Greenway, Harry
Montgomery, Fergus


Griffiths, Peter Portsm'th N)
Moore, John


Grist, Ian
Morgan, Geraint


Grylls, Michael
Morris, M. (N'hampton S)


Gummer, John Selwyn
Morrison, Hon C. (Devizes)


Hamilton, Hon A.
Morrison, Hon P. (Chester)


Hamilton, Michael (Salisbury)
Murphy, Christopher


Hampson, Dr Keith
Myles, David


Hannam, John
Neale, Gerrard


Haselhurst, Alan
Needham, Richard


Havers, Rt Hon Sir Michael
Nelson, Anthony


Hawkins, Paul
Neubert, Michael


Hawksley, Warren
Newton, Tony


Hayhoe, Barney
Nott, Rt Hon John


Heddle, John
Onslow, Cranley


Henderson, Barry
Oppenheim, Rt Hon Mrs S.


Hicks, Robert
Osborn, John


Higgins, Rt Hon Terence L
Page, Rt Hon Sir G. (Crosby)


Hill, James
Page, Richard (SW Herts)


Hogg, Hon Douglas (Gr'th'm)
Parris, Matthew


Holland, Philip (Carlton)
Patten, Christopher (Bath)


Hooson, Tom
Patten, John (Oxford)


Howell, Rt Hon D. (G'ldf'd)
Pawsey, James


Hunt, David (Wirral)
Percival, Sir Ian


Hunt, John (Ravensbourne)
Pink, R. Bonner


Hurd, Hon Douglas
Pollock, Alexander


Irving, Charles (Cheltenham)
Porter, Barry


Jenkin, Rt Hon Patrick
Prentice, Rt Hon Reg


Jessel, Toby
Price, Sir David (Eastleigh)


Jopling, Rt Hon Michael
Prior, Rt Hon James


Kaberry, Sir Donald
Proctor, K. Harvey


Kimball, Marcus
Pym, Rt Hon Francis


King, Rt Hon Tom
Raison, Timothy


Knight, Mrs Jill
Rathbone, Tim


Knox, David
Rees, Peter (Dover and Deal)


Lamont, Norman
Renton, Tim


Lang, Ian
Rhodes James, Robert


Langford-Holt, Sir John
Rhys Williams, Sir Brandon


Latham, Michael
Ridsdale, Sir Julian


Lawrence, Ivan
Rifkind, Malcolm


Lawson, Rt Hon Nigel
Rippon, Rt Hon Geoffrey


Lee, John
Roberts, M. (Cardiff NW)


Le Merchant, Spencer
Roberts, Wyn (Conway)


Lennox-Boyd, Hon Mark
Rost, Peter





Sainsbury, Hon Timothy
Thorns, Neil (Ilford South)


St. John-Stevas, Rt Hon N.
Thornton, Malcolm


Scott, Nicholas
Townend, John (Bridlington)


Shaw, Giles (Pudsey)
Townsend, Cyril D, (B'heath)


Shaw, Michael (Scarborough)
Trippier, David


Shelton, William (Streatham)
van Straubenzee, W. R.


Shepherd, Colin (Hereford)
Vaughan, Dr Gerard


Shepherd, Richard
Viggers, Peter


Shersby, Michael
Waddington, David


Silvester, Fred
Wakeham, John


Sims, Roger
Waldegrave, Hon William


Skeet, T. H. H.
Walker, Rt Hon P.(W'cester)


Smith, Dudley
Walker, B. (Perth)


Speed, Keith
Walker-Smith, Rt Hon Sir D.


Speller, Tony
Waller, Gary


Spence, John
Ward, John


Spicer, Jim (West Dorset)
Warren, Kenneth


Spicer, Michael (S Worcs)
Watson, John


Sproat, Iain
Wells, Bowen


Squire, Robin
Wheeler, John


Stainton, Keith
Whitelaw, Rt Hon William


Stanbrook, Ivor
Whitney, Raymond


Stanley, John
Wickenden, Keith 

Steen, Anthony
Wiggin, Jerry


Stevens, Martin
Wilkinson, John


Stewart, Ian (Hitchin)
Williams, D.(Montgomery)


Stewart, A.(E Renfrewshire)
Wolfson, Mark


Stokes, John
Young, Sir George (Acton)


Stradling Thomas, J.
Younger, Rt Hon George


Tapsell, Peter



Taylor, Robert (Croydon NW)
Tellers for the Noes:


Taylor, Teddy (S'end E)
Mr. Alastair Goodlad and


Temple-Morris, Peter
Mr. Donald Thompson.


Thomas, Rt Hon Peter

Mr. Richard Wainwright: I beg to move amendment No. 51, in page 12, line 22, leave out from "shall" to end of line and insert
`apply for the year 1981–82 only as regards the basic rate limit'.
With a brevity which I hope is suited to the hour, I am moving this amendment in the name of the Liberal Members. Members who have been here much longer than I may share my view that this has been an unusual Finance Bill Committee day on at least two counts. First, up to now—I hope that this amendment will serve to break the spell—it has been a day of total silence on the part of the Conservative Back Benchers. Not one Government supporter other than the emasculated team on the Front Bench has spoken during today's debate.
Secondly, the day has been devoted almost entirely to one principle—indexation. There again, I find it odd and rather disturbing that on a crucial principle of tax law there should have been no Back Bench Conservative contribution. This amendment may at least give the Tory Back Benchers a chance to come to the rescue of some of their supporters in the country.
The background to the amendment is simple. The law as sanctified by the Chancellor of the Exchequer only last year provides that among the many thresholds that are to be indexed in accordance with inflation over the previous 12 months is the point at which income is taxed at a rate higher than the basic rate.
This year, the Finance Bill goes out of its way to try to excuse the Government from operating that part of the law. It is no part of my purpose to suggest that the failure of the Government that is covered by the amendment is in any sense the worst dereliction of the Government in respect of indexation.
We have had today all the hard cases, all the main injustices and all the most foolish and perverse failures to index, and we ought to round off this day of indexation by


considering another example—one which does not create anything like as much hardship as those that we have been discussing heretofore but which is nevertheless important.
In the history of taxation, human nature being what it is, great importance has been attached socially to the point at which somebody in an executive or similar position becomes what used to be called a surtax payer. This is a notable landmark for people who measure their career success in those terms. It is important for the House regularly to consider at what point a person's income calls for taxation at an unusually high rate.
Last year the House, after very considerable debate, and at the instigation of the Government, decided that an income of £11,250, in terms of last year's money, should be the starting point for a higher rate of income tax. That was the top limit to which anyone could go without incurring more than the basic rate of 30 per cent. This year the Government seek to be allowed, as an exception, to make no adjustment whatever for the 15 per cent. inflation which has taken place during the past 12 months, whereas, if Parliament's view last year was correct, it seems only fair that the figure of £11,250 should be indexed at 15 per cent. to approximately £12,940.
Let us consider the main practical reason for indexing this limit—namely, to preserve some incentive effect, so that promotion or merit money for somebody in middle management is not immediately clobbered by a higher rate of taxation which has a disincentive effect. The basis of incentives at that level of income is that they should be stable, reliable and as permanent as possible.
I have sat in the House when, from a comfortable Opposition stance, hon. Members who are now on the Government Benches have railed at Labour Governments because of the instability of their incentives to industry to develop in the regions, to invest in new plant and so on. Conservatives used to claim with great vigour that those incentives varied hopelessly from year to year, that they could not be counted upon and that by the time a business had planned to develop somewhere the incentive had changed and the whole thing was hopelessly unstable.
But what have Conservative Members done now that they have responsibility? Last year, by indexing the thresholds, they gave middle management the impression that some kind of stable incentive was here to stay and that people in that position could plan ahead and not be clobbered merely through the silent, stealthy advance of inflation. But after only a year the whole thing has crumbled into ruins. People who were told last year that they had a great incentive given to them now find that it has wholly vanished. It cannot be an incentive as long as it is at the mercy of capricious Governments, as this limit has proved to be.
Incidentally, one byproduct is that any incentive that was held out last year, at some cost to the Revenue, is now worthless and might as well not have been given, because it has proved to be so transient and so unreliable. Yet the people at this level of income are people whom the Tories have always regarded and played up to as being of peculiar value to the economy. They are high on the Prime Minister's list of favourite people, who can be relied on to improve the economy, to take risks and to show entrepreneurial spirit. What is their reward? Their reward is the complete failure to index, even partially, the limit at which they pass into the realms of higher taxation.
That is another example of the havoc wrought when the Government suddenly decide to ask the House to exempt

them totally from a principle to which the Financial Secretary added his name when in Opposition. He gave the impression thereby that the Conservative Party was the party of indexation. This is the final proof that it is nothing of the sort.

Mr. Brittan: The speech of the hon. Member for Coble Valley (Mr. Wainwright) is a marvellously classic example of the way in which he can run true to form. He seeks to be all things to all men. Earlier he supported the official Opposition in favour of increasing the allowance in accordance with the requirements of indexation, for the sake of benefiting the lower-paid. He was entirely in favour of that. Although the Committee has decided not to take that course and that that is not an appropriate thing to do, the hon. Gentleman and his hon. Friends wish to persist with an amendment which would single out the better-paid for indexation.
The argument has shifted. The one-time friend of the "have nots" has become the self-appointed friend of middle management. No doubt the hon. Gentleman will say that he would like to be both. That is the Government's position. In effect, the Government have said that if they could proceed with the indexation provisions provided for by legislation—in the absence of a decision to the contrary—it would be right to carry them out across the board. The hon. Gentleman has addressed the Committee after it has taken decisions on the bulk of the indexation provisions. It is difficult to understand the logic of coming up with a partial indexation of the higher rate.
Given his experience, I am sure that the hon. Gentleman has not fallen into this amendment by accident. It is important to point out its consequences. It proposes that the starting point for the higher rate of tax should be increased by £1,750 to £13,000. Raising the higher rate threshold in that way would also increase by £1,750 the starting point of each of the successive higher rate bands. However, for some reason which the hon. Gentleman has not explained, he has not carried out the indexation provisions as one might have expected him to do. The widths of the bands are not altered by the amendment. The amendment offers a partial indexation of somewhat inexplicable and certainly unexplained type to a section of those who pay at the higher rate of tax. It seems strange to increase the higher rate threshold and the starting point of successive rate bands, but not their width.
The reality is that it is impossible to be all things to all men. Although one accepts the general case for indexation, it has not been possible to introduce it. Therefore, there is no justification for indexation on a partial basis under cover of giving incentives to middle management.
The truth is that by the courageous action that my right hon. and learned Friend took in his first Budget the shape and picture of incentives were altered permanently for those on the higher rates of tax and those on the standard basic rate.
In the light of the decision taken earlier by the Committee, I find it difficult to understand why the hon. Gentleman proposes his amendment. I cannot recommend it to the House.

Mr. Richard Wainwright: Having heard the remarks of the Chief Secretary, I am not surprised that Conservative Back Benchers have failed to support him.


The only argument that might have carried apparent weight will vanish when I explain to those who are not privy to these matters that the Liberal Party is in no sense part of the usual channels. It was not with the consent of or consultation with the Liberal Party that the usual channels, in their wisdom, decided to discuss the amendments to clause 23 before the amendments to clause 19. Our amendment is logical and reasonable. It is impudent for the Chief Secretary to say; because he has conned the Labour segment of the Opposition into taking the clauses in reverse order, that amendment No. 51 is defective.
I am satisfied now that the Government have no possible foundation for producing the only excuse that I thought they might offer, namely, to ask their friends and supporters to bear with them because "it will be all right next year".
There was an enormous gap in the Chief Secretary's remarks because of his failure to offer the slightest comfort to the group on whose behalf I am pleading. There was no

willingness to suggest that it will be better next year. He has made it brazenly plain in table 8 of the Financial Statement, for which the Financial Secretary was responsible on Budget day, that for 1982–83 the only scope for altering taxation—the implied fiscal adjustment—is a mere £1 billion. In the apparent El Dorado of 1983–84—when one would have thought there might be a reason for staging an El Dorado—the implied fiscal adjustment is a mere £2 billion.
Through tabling these amendments we have elicited from the Government that they are unable to hold out any hope of redressing this year's blunders and hardships in the next two years. I hope that that will sink home to the British public and that at last they will begin to realise what a pup they bought in 1979.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 ordered to stand part of the Bill.

To report Progress and ask leave to sit again tomorrow—[Mr. Brittan.]

Committee report Progress; to sit again tomorrow.

Orders of the Day — Education (Scotland)

Mr. Harry Ewing: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Education (Allowances for Assisted Places in Secondary Schools) (Scotland) Regulations 1981 (S.I., 1981, No. 488), dated 26 March 1981, a copy of which was laid before this House on 30 March, be annulled.
The regulations set out the conditions attached to the allowances payable to the parents of children admitted to specified schools, in this case those listed on page 12 of the statutory instrument.
The Opposition are bitterly opposed to the assisted places scheme in general. We have already intimated on a number of occasions—and we intimate it again in case it has not got through—that at the end of the first financial year in which a new Labour Government come to power they will terminate the scheme. We will not tolerate any specified school asking for time to adjust because it has failed to notice our warning. The time to adjust begins now, and we sternly warn schools not to be seduced by the Under-Secretary of State for Scotland who is responsible for education into taking part in the assisted places scheme.
The regulations set out the allowances payable and deal with the income of the parents involved. Even though the Opposition are so bitterly opposed to the scheme, we are entitled to probe the Minister on one or two points. The regulations deal with the age groups of the children who may be eligible to take part in the scheme. Regulation 4(2)(a) refers to
a child who has attained the age of 12 years on 31 July of the year, which, assuming him to have been admitted to an assisted place would he his first assisted year".
It is clear into which age group that child will fall. Sub-paragraph (c) refers to
a person who at the commencement of a school year … has not attained the age of 20 years. There again, the age group is mentioned. But sub-paragraph (b) refers to "a young person". That is the one category that does not have an age group attached to it. The Under-Secretary must explain into which age group such a "young person" would fall.
The conditions of the provisions to be made for a person to whom the regulations will apply are rather obscure.
The regulations refer to anyone who has lived in a member country of the European Community
throughout the period of three years immediately preceding 1st January in the calendar year in which his first assisted year begins assuming him to have been admitted to an assisted place.
I assume that parents of children who have resided in a country that formed the European Community on 1 January this year will not be eligible to accept or to apply for an assisted place, for the simple reason that they will not have three years' residential qualification in an EEC country. There is a need for the Minister to explain the situation in more detail for the benefit of further countries that may consider joining the EEC although for the life of me I cannot understand their reasons for wishing to do so.
I turn now to the declaration of relevant income for the financial year immediately preceding the school year in relation to which an application is made. According to the statutory instrument, if such a declaration cannot be furnished, a declaration of relevant income for the

financial year preceding that financial year or a declaration of estimated relevant income will be sufficient. That is a hotchpotch. In his desperation to get his much-loved assisted places scheme into operation, the Minister is telling parents that if they cannot supply a declaration of income for last year, a declaration for the previous year can be accepted. If that cannot be supplied, the Minister is asking for an estimate of likely earnings. In the assisted places scheme anything goes, because the Minister is so desperate to see the scheme introduced.
Although the statutory instrument deals with the financial limits and qualifications, the question of the educational qualification that pupils will have to show for an assisted place also arises. The educational case for the introduction of the scheme into the Scottish education system has still not been presented. The Minister seeks to drag himself along on the coat tails of the Secretary of State for Education and Science. The hon. Gentleman seems to have a feeling of inferiority because he has not yet reached the dizzy heights achieved by the Secretary of State in England and Wales. There is no educational case for the scheme in England and Wales, and still less in Scotland. The Secretary of State and his junior Minister have not laid down any educational criteria for the admission of children to the assisted places scheme. The hon. Gentleman knows that the schools will select the pupils without any reference to a child's educational ability.
The Minister knows perfectly well—I was about to say that I was surprised that he maintains his denial of knowledge of the situation, but I am not surprised—that the assisted places scheme will divide schools, communities and families. One child in a family will be selected—not for a good educational reason—for an assisted places scheme in one of the specified schools while the other children are not selected. That will cause stresses and strains within families.
If headmasters and those responsible for selecting children choose to cream off the children whom they consider to be the most desirable pupils—educationally or otherwise—from the primary schools, they will thereby damage part of the State sector.
That is how the children are to be selected. The method has nothing to do with educational qualifications; it is a pure process of selection. In Committee, the hon. Member for Perth and East Perthshire (Mr. Walker) said that if his child was lucky enough—I think that those were the words he used—to be selected for one of these assisted places schemes, he would be delighted. I think that he was nearer the truth than he realised when he said that. He was right to use the words "lucky enough", because it is a matter of luck, not education.
In asking the Minister to reply to the detailed questions that I am putting to him about age groups, the declaration of relevant income, the matter of residence, and countries which are members of the EEC and others, I hope that he will take this opportunity—it may be his last, if rumour is true—to explain how the assisted places scheme will operate and how the children will be selected. The hon. Gentleman has never said that the children who are the most successful in examinations or those who show the most aptitude are those who will be selected. The hon. Member for Perth and East Perthshire was nearer the truth, and I am sure that his daughter has an excellent chance of being selected for a scheme. I do not know her, and she may be the brightest child in the class, but the selection


will have nothing to do with that. It will be because he is the Member of Parliament for Perth and East Perthshire that she will have an excellent chance of being selected.

Mr. Bill Walker: The hon. Member probably overlooks the fact that it is unlikely that I would get any financial assistance because I would be considered to be too well off.

Mr. Dennis Canavan: Yes, the hon. Gentleman is filthy rich.

Mr. Ewing: I let my hon. Friend the Member for West Stirlingshire (Mr. Canavan) answer that intervention.
I am glad that what the hon. Gentleman said in Committee was mere speculation. Nevertheless, the truth is that those with influence in the community will have a much better opportunity of having their children selected than those who do not have such influence.
It is not a laughing or light-hearted matter when a child's educational future will be decided in this cavalier way, yet such an attitude has been shown by Scottish Ministers. The Under-Secretary the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), sniggers in his usual fashion; the Minister responsible for health is not very worried about education or the way in which children in his constituency will be treated; and the Minister responsible for education has done more damage to Scottish education than any other known person.
This statutory instrument is totally irrelevant to the needs of Scottish education. It is fitting that it should be introduced at 10.45 pm, when the Scottish press has gone to sleep and when, as usual, the Minister hopes that he can slip it through almost unnoticed without incurring the wrath of the parents of Scottish children.
I assure the Minister that we shall not allow this matter to go unnoticed. I end as I began. The Government, with their built-in majority, may succeed tonight, but it will be a temporary and shallow victory. The Labour Party will reverse this decision at the first opportunity following the next general election. Therefore, although this statutory instrument may succeed in the Lobby, it will be only a temporary measure which will last no longer than polling day at the next general election.

Mr. John MacKay: The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) proved to myself and to my hon. Friends who served on the Education (Scotland) (No. 2) Bill Committee that we did not miss much. The only merit of his speech was that it lasted 15 minutes, even though I have no doubt that the hon. Gentleman could have spun it out for about 15 hours. Certainly, his presence in Committee during our discussion on the assisted places scheme would not have added one jot or tittle to the educational argument advanced by the Opposition. Indeed, I strongly suspect that it would have diluted that argument.
I understand the hon. Gentleman's annoyance that he and his hon. Friends will be denied the ability to apply for the assisted places scheme, because the salaries of Members of Parliament are above the level of relevant income. That probably annoys quite a few Labour Members, who thought that this would be a way of sending their children to private schools, just as some of them were sent to private schools by their parents.
We should put the amount of money about which we are talking into some sort of context. Currently, independent schools in Scotland receive £3·4 million—[HON. MEMBERS: "No they do not"]

Mr. Canavan: The hon. Gentleman is quite wrong. The grant-aided schools receive £3·4 million, and not the independent schools. The independent schools will receive additional money under this scheme.

Mr. MacKay: I accept that small correction—[HON. MEMBERS: "Oh."] Well, it allows me to advance a better argument. This statutory instrument will help parents to send their children to any of the private schools which are in the scheme, not just to those which by an accident of history have remained from the previous grant-aided sector. I come back to the £3·4 million. I am sure that my hon. Friend the Minister will confirm that that sum, at its present-day value, will be used for the assisted places scheme.
Some weeks ago I read with some interest in the Sunday Post that vandalism in Strathclyde cost £5 million last year. Perhaps vandalism in Scottish schools costs £8 million to £10 million. I know that at least one Opposition Member has indulged in football hysteria. As long as it is blessed as such, perhaps they do not mind. But, in the context of vandalism costing £8 million in Scottish schools, £3·4 million spent on education—and not only on education of the privileged, as the Opposition claim—is not that costly. The statutory instrument deliberately moves the grant aid, which at present can be argued as going only to the privileged, to those who are not privileged—the less well off. The money presently given to the grant-aided sector reduces the fees of children attending such schools. In future, when we phase from the present system to that outlined in the statutory instrument, the money will help the children whose parents cannot otherwise afford to send them to such schools.
The scheme will enable more people to benefit from education. It will enable more schools to participate—as the hon. Member for West Stirlingshire (Mr. Canavan) rightly pointed out—in the scheme than participate in the grant-aid scheme. I thought that the Opposition would be in favour of reducing the criterion of ability to pay. The money given to the private sector will be channelled through less-well-off parents to the schools.

Mr. Jim Craigen: Will the hon. Gentleman confirm that the overall cost of the assisted places scheme will be subject to cash limits and that, because of the variables in the scheme, it will not be an open-ended commitment by the Government?

Mr. MacKay: I am sure that the Minister will answer that question. The hon. Gentleman poses a real problem. When the Government introduced the Tenants' Rights, Etc. (Scotland) Bill last year, the Opposition said that no one would want to buy council houses. It transpires that many of the tenants want to do so. The Opposition cannot decide whether no one wants the scheme or whether so many will want it that the Minister will have to impose a cash limit so that he does not spend more than £3·4 million. If many people want to take part in the scheme, I shall urge my hon. Friend the Minister to expand the cash limit. The Opposition refuse to appreciate that every child who attends one of the schools does not cost the State the full cost of State education. I cannot understand why it is


wrong to transfer the money being spent on a child from the local comprehensive school to being partially spent helping the assisted places scheme.
The hon. Gentleman's intervention proves that many more parents will be interested in the scheme than the Opposition want to believe. When the Opposition are returned to power in 1990 or the next century, children will be participating in the assisted places scheme that the Opposition will be unable to do what they want to do.
I know that the Opposition will welcome—as I do—the inclusion in the statutory instrument of school travel grants, clothing grants, meal grants and field study grants. In Committee, the Opposition were keen to say that if there was to be an assisted places scheme those items should be taken into account. I have no doubt that they will manage to find some means of shifting their ground tonight.
There are parents whose children have to leave home to attend school. I accept that at this stage it would not be a proper use of money to incorporate the boarding component. However, where a local authority is having to pay a boarding fee because a child has to be put into digs or into a local authority hostel to attend school, that is different from the norm.
There are many parents on the islands who are satisfied with the education that their children receive when they leave home at 12 to attend mainland schools. However, many of them would like the choice of a seven-day school rather than a five-day school that tries to do its best at weekends. They would like their children to go to a boarding school. There are parents who would like their children to have a Catholic education. Their children have to leave home to go to school in any event, and they would like them to attend a Catholic boarding school with a religious background.
I hope that my hon. Friend the Under-Secretary will address himself to this issue. He assured me in Committee that in the circumstances that I have outlined local authorities could help parents with boarding fees if they had to pay boarding fees in any event, be they for digs or local authority hostels. I suggest that my hon. Friend could be rather firmer with the authorities. Parents who qualify for an assisted places scheme for sending their children to a fee-paying school on the mainland and who want to give their children a seven-day week boarding education should be helped by the authority with the fees. It would not cost the authorities any more than it costs now to send the children to school on the mainland.
There are schools—I name one that is not a Catholic religious school—such as Keil school, Dunbartonshire, which caters especially for boys from rural areas, especially from Argyll and other parts of the Highlands. It has a good reputation for the way in which it looks after boys who have to leave home at the age of 12 and whose parents are concerned about their well-being.
I ask my hon. Friend to consider firming up this respect of the measure to ensure that authorities do not use the party political dogma of the Labour Party to blind themselves to the fact that parents have a right in the way in which their children are educated. If their children are leaving home at 12, they should be able to choose the sort of boarding school they attend and expect the local authority and the State, via the measure that we are considering, to help them with the fees, including boarding fees, that go with the attendance.
I welcome this measure. It is a portent of our determination that parents should have as much choice as

possible in the education of their children. That choice includes the choice of sending their children to an independent school. Whether I would do it or whether the Labour Party would do it is neither here nor there. Parents who wish to do it should be given the opportunity of doing so, and I welcome the measure.

Mr. Ernie Ross: In Committee on the Education (Scotland) (No. 2) Bill, Labour Members made it clear that they had identified what Conservatives were trying to do. Their purpose is to redistribute wealth in accordance with their views, and especially those of the hon. Members who represent parts of Edinburgh. The Bill is designed to win over parents in the Lothian region to whom promises were made during the general election.
Those who will seek to take advantage of the Bill in the sense that we are discussing already have their children in grant-aided and fee-paying schools. That is a factor that caused us distress when we examined the Bill in Committee. It will be of no benefit to the more than 95 per cent. of State sector children. The amount of money, whether it be £3·4 million or £4 million, could be better spent. In Committee we gave many suggestions of where that money could be spent. I shall not waste the time of the House by going over them.
I am pleased that the hon. Member for Aberdeen, South (Mr. Sproat) is with us tonight. I am concerned about the financial aspects of the statutory instrument. I should like to hear the Minister, although I would rather have heard his right hon. Friend the Secretary of State for Scotland, give us an assurance that all statements of income for the assisted places scheme will be verified by the Inland Revenue. I know that that matter keenly interests the lion. Member for Aberdeen, South. I am certain that he will join me in the demand for the prosecution of those who make fraudulent statements. Like me, he will be keen to know what the penalties will be for the people who seek to misrepresent their income during their claims for assisted places.

Mr. Neil Kinnock: One hundred lines.

Mr. Ross: It may be 100 lines, but I am certain that the hon. Member for Aberdeen, South will not stick at that.
I am certain that the hon. Member for Aberdeen, South will once again make a name for himself, this time in launching a campaign against assisted places scheme scroungers. I shall be right behind him, and so will every Labour Member. I look forward to the Minister's comments about how he will ensure that his hon. Friend the Member for Aberdeen, South can remain in the relaxed position which he is now adopting.
I also wish to ask, as did my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), what assurances the Minister can give us about exactly how the information from the schools on how pupils will be selected for the assisted places scheme will be determined. In Committee, the Minister said that the method of selection would be left to the schools. Labour Members are concerned about the privacy which will be given to those schools. We are concerned about the way in which it will be used against any working-class parents who, by some mistake, decide to apply for some of the assisted places.
Regulation 14 mentions the remission of charges for meals. I should be interested to know exactly how the


charitable status of those schools is related to their ability to take advantage of that status and of the EEC food mountains as some are doing, as we discovered in Committee.
In Dundee, as a Member of Parliament, I made a simple request to the Dundee high school board of governors that they should advise me whether they were taking advantage of the intervention food mountain in Reading. I wanted to know whether, as part of their charitable status, they were using cheap butter and meat to assist the people who least needed to be assisted. They refused to divulge that information. I should like the Minister to comment on that. Does he think that it is acceptable that one of those charitable institutions should be allowed to deny a Member of Parliament that information, which is vital to many people in Dundee, who would also like to take advantage of that cheap food, whether it be butter or meat?
Does the Minister agree with the continuing abuse of parliamentary privilege by Dundee high school? He knows that it sent out forms for places before the Education (Scotland) Bill had its Second Reading. He did not seem to condone those actions at that stage. What does he think now, following the announcement in last Friday's Courier and Advertiser? The school now wants the forms back by Monday at the latest—and that was announced even before this debate and before the Bill has come back on Report. I hope that the Minister will condemn the abuse of parliamentary privilege.
Why has the school asked whether applicants have a connection with the school? As we suggested in Committee, assisted places will be awarded over claret and cigars at the annual old boys' reunion. The measure is not about extending privilege and education. It is to continue the old-boy set-up. As has been said, on polling day plus one we shall ensure that there are fewer cigars and less claret and that it is harder to drink. We shall get rid of the obnoxious legislation.

Mr. Peter Fraser: It is always a great pleasure to follow the hon. Member for Dundee, West (Mr. Ross). It surprises me that the Labour Party has not unanimously decided that he should be Shadow Chancellor of the Exchequer. We are talking of only £3·4 million. In about four minutes, the hon. Gentleman has spent £25 million on education in Scotland. In Committee, he promised my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) a new high school in his city, under the Warnock proposals he promised 400 remedial teachers and he promised an improvement in teacher-pupils ratios unparalleled by any achievement of the Labour Government.
We continually witness the grossest hypocrisy. We are talking of only a modest sum compared with the total expenditure on education in Scotland. I bet that the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) does not know how much money is spent in Scotland. The expenditure that we are talking of is less than 0·5 per cent. of the total expenditure on education in Scotland, yet the Opposition suggest that if we were to abandon the modest extension of choice in one fell swoop we could transform education in Scotland.
We should put the matter into proper perspective. There are compelling arguments for supporting the measure. My

hon. Friend the Member for Argyll (Mr. McKay) raised an interesting and delicate argument about youngsters who do not live on the mainland. Some parents can have their children at home every evening and ensure that they are properly cared for. Others live in a remote highland or rural area or in the islands of Western Scotland. We should give those parents greater choice of schools at which their children can board.
I share my hon. Friend's concern. I trust that the Minister, perhaps not now—I appreciate that he is up against enough opposition as it is—but as the scheme progresses, will appreciate my hon. Friend's point that this would be a real opportunity to extend that choice.
Most significantly of all, however, whenever that argument is advanced, there is a deafening silence from the Opposition Benches. I have no doubt whatever that no one will seriously argue the case about those who live in the Western Isles or in the remote Highlands. Even if the rest of parental choice in terms of the assisted places scheme were to fall in the great cities of Scotland, they will not even have the guts to say that it should at least obtain in the remote parts of Scotland.

Mr. David Lambie: I intervene briefly in this short debate to support the opposition to the regulations voiced by my hon. Friend the Member for Stirling, Falkirk and Grangemount (Mr. Ewing) on behalf of the Labour Party. The regulations would transfer £3·4 million of public expenditure to the private sector of education in Scotland. That sector comprises between 1 per cent. and 2 per cent. of the total school population in Scotland, and is irrelevent to Scottish education.
This debate would not have taken place if we had had a Scottish Assembly with control of education in Scotland. It would have been a Labour Assembly, just as the overwhelming majority of education authorities in Scotland are Labour controlled and just as the majority of Members of Parliament from Scottish constituencies are Labour Members. Labour people do not support the Government's policy.
In one sense, however, I congratulate the Government. They are carrying out the policy that they put to the people of England and Wales at the last election, when they said that they would bolster up the private system of education in England and Wales. But they have no right to force that policy upon the people of Scotland, where they have no mandate at either local or national level.
The order is a continuation of the Government's whole financial policy since the last election. From their first Budget, their policy has been to transfer £4,500 million in taxation from the poorest sectors of the population to the richest 20 per cent. In their first Budget, they gave increased benefits to the richest members of society. They are pursuing the same policy today. I am hopeful that after the next election we shall have a Scottish Assembly and will never find ourselves in this position again.
Finally, it was good to hear my hon. Friend the Member for Sterling, Falkirk and Grangemouth give the assurance that one of the first actions of the next Labour Government will be to eliminate this concession to the private sector of education. I should have hoped that he would give us the assurance that most Labour people in Scotland want. We do not want simply the abolition of this £3·4 million subsidy to the private sector. We want the total abolition of the private sector of education in Scotland. I am glad


to see that the Shadow Secretary of State for Education and Science for England and Wales is listening to the debate. Even if that policy cannot be carried out in England and Wales, perhaps because of opposition from his own side, we shall certainly ensure that the Scottish manifesto will contain proposals to wipe out the private sector of education. Why should the private sector get concessions from the Inland Revenue? Why should it get concessions as charitable organisations from local rates when it pays either no rates or 30 per cent?
Why should I read in every quality newspaper on Sunday large advertisements saying "Why pay school fees? Make preparations now"? Why should the poor people in my constituency, who are finding it difficult to get supplies of books, jotters and pencils from education authorities because of the cutbacks by the Tory Government, have to subsidise the people who send their children to the 42 fee-paying schools in Scotland? If there is to be another spokesman from the Labour Front Bench, I hope that he will give a guarantee that in Scotland fee-paying schools will be wiped out when we get control again.

Mr. Gordon Wilson: I congratulate the hon. Member for Central Ayrshire (Mr. Lambie) on making very good nationalist points. When he said that the Conservative Party did not have any mandate to govern in Scotland, he was right. It is the Achilles heel of the Labour Party in Scotland that, knowing that, it does not do anything to enhance the Scottish voice and the Scottish influence. [Interruption.] The hon. Gentleman said that we stopped him getting a Scottish Assembly. Let me remind him that the Labour Party refused to give effect to the vote for the setting of a Scottish Assembly. The hon. Member for Bedwellty (Mr. Kinnock), on whom is lavished such praise, was one of the rebels in the Labour Government who tried to kill the idea of a Scottish Assembly. Yet the hon. Member for Central Ayshire is quite pleased to work alongside him, despite the fact that he has already been stabbed in the back.
However, we are discussing the assisted places scheme which I have opposed in Committee. I wish to confirm my opposition to it. It is obnoxious and alien to the Scottish tradition of education in the public sector. It is a pity that the Government are willing to waste money in this fashion instead of attempting to improve conditions in schools attended by most children in Scotland by ploughing the funds into them. It is a form of educational vandalism which the Government are perpetrating. Whatever one can say about the quality of education, the scheme is certainly socially divisive.
The Labour Party has indicated that it wishes to repeal the scheme either on polling day or the day after. I think it is trying to advance its position with regard to that taken by the right hon. Member for Bristol, South-East (Mr. Benn), who would allow a month before the House of Lords was to go into liquidation. This scheme should go because it is harmful.
If one looks at the regulations, one can see immediately some of the double standards which have been employed. I should like to put some questions to the Minister. In relation to part II, entitled "Eligibility for admission to assisted places", can he give the meaning of regulation

4(2)(c) on giving aid to a person aged 18 but under 20? What is the justification for aid being given beyond the normal school leaving age in Scotland of either 17 or 18?
On the words "ordinarily resident" in regulation 5(1)(b), will the Minister deal with the position of children who come to join immigrants who have been in residence for the qualifying period but who may not themselves meet the qualification? Is that covered? If not, how does he envisage that it will operate? [Interruption.] I would be in favour of their being given the same rights as anybody else. It is so commonplace that I did not think of spelling it out.
I draw the Minister's attention to part III, "Remission of fees". Here we have a provision relating to payment of tuition and other fees. As the Minister knows, the parents of children attending State schools have to pay for tuition in certain subjects, yet persons paying fees in the private sector are to be given exemplary treatment. The parents are to be absolved from responsibility or to be given help.
Under regulation 6(2)(c), what other fees are envisaged in relation to the general all-encompassing phrase
such other fees in respect of a pupil's attendance at a specified school"?
I also intended to make the point that has been mentioned already concerning false declarations. If people can be prosecuted for social security frauds, the same sanctions should apply under these regulations. It would be interesting to know why the Minister has adopted a lower standard in relation to false declarations than applies under the social security system.
Has the Minister budgeted for the cost of school travel grants? Will he confirm that expenditure under 25 miles would have to be met by the parents and that there would not be any help under the scheme?
With regard to clothing grants, regulation 13(1) provides:
A specified school shall in accordance with this Regulation make to the parents of a pupil holding an assisted place at that school a clothing grant in respect of clothing expenditure in relation to such a pupil.
I have been informed by my local branch of the DHSS that, while the DHSS can help with the provision of clothing if there is a shortage of clothing, it is under no obligation to supply school uniforms. If it is correct that a pupil attending a State school will not get help from the DHSS in the supply of a uniform, why are parents who have children taking places under the assisted places scheme to be given help? Does the Minister agree that the scales are very generous compared with the practice adopted by the DHSS in refusing help to parents of children at State schools who may be in need?
The same question may be asked about the remission of charges for meals where the relevant income does not exceed £4,000. Will the Minister state what level of income he would be prepared to accept in regard to free school meals in the State sector? Under the regulations, those parents who have children taking up assisted places will be feather-bedded compared with children attending schools in the State sector.

Mr. Dennis Canavan: It shows utter contempt for the House that such an incompetent Minister should introduce these regulations when the legislative framework for assisted places has still to be approved by Parliament. The Bill only recently completed


its Committee stage. It has still to complete its Report Stage and Third Reading, let alone its passage in the other place.
I do not know how our parliamentary rules let the Minister get away with such sheer brass neck. The regulations appear to come under the Education (Scotland) Act 1980. If the Minister is arguing that the legislation in the Education (Scotland) (No. 2) Bill is unnecessary, why on earth is he conning us by introducing a legislative framework? I hope that he will reply to that point.
Schedule 1 contains a list of 42 schools. In his discussion documents about the assisted places scheme, the Minister said early on that he wanted a reasonable geographical distribution of schools throughout Scotland. He has clearly failed to achieve that. There are 12 education authorities in Scotland, of which four do not have schools listed in schedule 1. There is no inclusion of a school from the Borders, Western Isles, Orkney or Shetland. Four of the education authorities in Scotland have only one school in the list. I refer to Central region, Fife region, Highland region and Dumfries and Galloway. Therefore, there is not much of a geographical distribution.
Indeed, 14 of the schools are in Strathclyde. However, it must be borne in mind that Strathclyde covers about half of Scotland's school population. Fourteen schools are in the Lothian region, and 13 of them are in Edinburgh. Loretto is just on the outskirts of Edinburgh. Edinburgh's representation is out of all proportion, because Edinburgh has only about one-tenth of Scotland's population. Nevertheless, it has about one-third of the schools. The Minister is catering for only a few of his constituents and for the Edinburgh bourgeoisie, who are obsessed by the need to send their children to private, fee-paying schools. He is hoping to buy votes with taxpayers' money.
No school from my constituency is on the list, for the simple reason that there is no enthusiasm in my constituency for such a crazy scheme. Indeed, the opposite is true. There is great anger and resentment, even among those who voted Tory at the general election. Parents are crying out for more school accommodation in the public sector. People are calling out for more teachers in order to improve educational opportunities for their children in the public sector. There is great and justifiable anger and resentment, because about £3·5 million of public money is being spent on the private sector of education.
Many parents in my constituency, in places such as Killearn and Dunipace, are far from satisfied with what their children get. It is not the Central regional council that is to blame, but the miserly attitude of the Minister who is supposed to be in charge of education.
The amount of money involved in the full remission of fees is not inconsiderable. For example, Loretto has fees of no less than £525 per term. That is the Solicitor-General's old school, but I notice that he is playing truant again tonight. At Fettes the day fees are £750 per term. That is £2,250 per year. If someone is there for six years, he will receive £13,500. A student could be at that school for more than six years, because students are allowed to stay at school until they are almost 20. Someone could go to school perhaps for eight years and could pocket £18,000. What type of situation is that? One could well

imagine the headmaster of Fettes encouraging wee Georgie to stay on for his seventh or eighth year simply in order to squeeze more money out of the Minister.
There seems to be an anomaly, because it would seem that EEC nationals will be able to benefit from the scheme. I am all in favour of introducing a better international dimension to education, but it is unfair that the Minister should make it easier for EEC nationals to go to fee-paying schools in Scotland while he charges overseas students from Commonwealth countries the highest fees in the world.
The question was posed whether there is a statutory limit to the total amount. There does not appear to be a cash limit in the regulations or in the Bill. I hope, therefore, that the Minister will reply to that and bear in mind the limited amount of money that is available. It would appear that there is a great deal of money—£3½ million or more, increased by the Government from £900,000. That was one of their first acts in Government. One of our first acts when we return to Government will be to reduce the amount to zero.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): My right hon. Friend the Secretary of State made it clear on Second Reading of the Education (Scotland) (No. 2) Bill that we would use our powers under the 1980 Act to place these regulations to introduce an assisted places scheme before the House. There is no need for anyone on either side to be surprised that the regulations have been laid.
The hon. Member for West Stirlingshire (Mr. Canavan) talks about brass necks and criticises an assisted places scheme. He should be reminded that he is in an assisted place and lives in an assisted place. That is not in contest, because he lives in a council house.

Mr. Canavan: I would get more assistance if I had a mortgage, you silly ass.

Mr. Fletcher: To carry on with indignation about assisted places is unjustified.
The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) addressed himself to a new scheme to help lower income families—a new idea and innovation. Yet his first words against the innovation is that "We shall abolish it" because the Opposition have not had a new idea for about 50 years. They are frightened of any sort of change, option or choice for parents. They are frightened to allow their constituents to make decisions for themselves but are trying to keep them under the thumb of the Labour Party.
The proposal is part of our general proposals to extend parental choice in Scotland. In doing that, we are meeting the wishes of people all over Scoland who are excluded from that choice for financial reasons. Labour, as usual, disagrees and shows contempt for choice and for consumers of education, as it did for giving people the right to buy their council houses if they wished to do so.
I shall attempt to answer as many questions as I can in the time available. The hon. Member for Stirling, Falkirk and Grangemouth asked about the definition of "young person". That is a person defined in section 135(1) of the 1980 Act as someone between the ages of 16 and 18. The hon. Member asked about new entrants from the EEC. He


is correct that new entrants require three years' residence in the EEC—that is, from the date the new country entered the Community
The hon. Member also asked about educational qualifications for an assisted place. In Committee that was discussed at length. I made the point then, and I make it again now, that this is a scheme to increase parental choice, not to choose exceptionally able pupils. Schools will make the choice in the normal way about the pupils to whom they wish to give a place. The criteria that we discussed in Committee apply to this regulation. The schools decide which pupils will benefit from the education provided.

Mr. Robert Hughes: What does that mean?

Mr. Fletcher: That means precisely what I say.
The hon. Member for Central Ayrshire (Mr. Lambie) has no justification or facts on which to base his accusation that the scheme is at the expense of books and equipment in our schools in Scotland. He should bear in mind especially the fact that parents of children at independent and grant-aided schools pay their full rates and taxes to help meet the costs of the public sector, quite apart from contributing to the costs of the assisted places scheme.
My hon. Friends the Members for South Angus (Mr. Fraser) and Argyll (Mr. MacKay) raised the question of local authorities in Highland and rural areas and in the islands using the cash that they have available for boarding fees in State schools to pay for boarding fees in private schools, if places are found for children under the scheme. As I said in Committee, there is nothing to stop a local authority from using the funds in that way. But we prefer to leave it on a voluntary basis. Local authorities may pay boarding fees under the scheme if they wish.
My hon. Friend the Member for Argyll was right to point out the expansion of the scheme, from 22 schools under the block grant system, which has existed in Scotland for many years, to 42 schools—opening up choice under the new scheme.
An interesting aspect of the scheme is that applications are coming in for the children of clerks, tradesmen, engineers, secretaries and, above all—the profession at the top of the list of applicants for assisted places throughout the United Kingdom—those of teachers.

It being half-past Eleven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 4 (prayers against statutory instruments, &amp;c. (negative procedure)).

The House divided: Ayes 225, Noes 281.

Division No. 172]
[11.31 pm


AYES


Abse, Leo
Brown, Hugh D. (Provan)


Adams, Alien
Brown, R. C. (N'castle W)


Anderson, Donald
Brown, Ron (E'burgh, Leith)


Archer, Rt Hon Peter
Brown, Ronald W. (H'ckn'y S)


Ashley, Rt Hon Jack
Buchan, Norman


Ashton, Joe
Callaghan, Jim (Midd't'n &amp; P)


Atkinson, N.(H'gey,)
Campbell, Ian


Barnett, Guy (Greenwich)
Campbell-Savours, Dale


Barnett, Rt Hon Joel (H'wd)
Canavan, Dennis


Beith, A. J.
Carmichael, Neil


Benn, Rt Hon A. Wedgwood
Carter-Jones, Lewis


Bennett, Andrew(St'kp't N)
Clark, Dr David (S Shields)


Bidwell, Sydney
Cocks, Rt Hon M. (B'stol S)


Booth, Rt Hon Albert
Cohen, Stanley


Boothroyd, Miss Betty
Coleman, Donald


Bray, Dr Jeremy
Conlan, Bernard





Cook, Robin F.
Kinnock, Neil


Cowans, Harry
Lambie, David


Craigen, J. M.
Lamond, James


Crowther, J. S.
Leadbitter, Ted


Cryer, Bob
Leighton, Ronald


Cunliffe, Lawrence
Lestor, Miss Joan


Cunningham, G. (Islington S)
Lewis, Arthur (N'ham NW)


Cunningham, Dr J. (W'h'n)
Lewis, Ron (Carlisle)


Dalyell, Tam
Litherland, Robert


Davidson, Arthur
Lofthouse, Geoffrey


Davies, Rt Hon Denzil (L'lli)
Lyons, Edward (Bradf'd W)


Davies, Ifor (Gower)
Mabon, Rt Hon Dr J. Dickson


Davis, Clinton (Hackney C)
McCartney, Hugh


Davis, T. (B'ham, Stechf'd)
McDonald, Dr Oonagh


Deakins, Eric
McElhone, Frank


Dean, Joseph (Leeds West)
McGuire, Michael (Ince)


Dempsey, James
McKay, Allen (Penistone) 

Dewar, Donald
McKelvey, William


Dixon, Donald
MacKenzie, Rt Hon Gregor


Dobson, Frank
Maclennan, Robert


Dormand, Jack
McMahon, Andrew


Douglas-Mann, Bruce
McNally, Thomas


Dubs, Alfred
McNamara, Kevin


Duffy, A. E. P.
McTaggart, Robert


Dunn, James A.
McWilliam, John


Dunwoody, Hon Mrs G.
Magee, Bryan


Eadie, Alex
Marshall, D(G'gow S'ton)


Eastham, Ken
Marshall, Dr Edmund (Goole)


Ellis, Tom (Wrexham)
Marshall, Jim (Leicester S)


English, Michael
Martin, M(G'gow S'burn)


Ennals, Rt Hon David
Mason, Rt Hon Roy


Evans, Ioan (Aberdare)
Maxton, John


Evans, John (Newton)
Maynard, Miss Joan


Ewing, Harry
Meacher, Michael


Faulds, Andrew
Mikardo, Ian


Field, Frank
Millan, Rt Hon Bruce


Fitch, Alan
Miller, Dr M. S. (E Kilbride)


Flannery, Martin
Mitchell, Austin (Grimsby)


Fletcher, Ted (Darlington)
Mitchell, R. C. (Soton Itchen)


Ford, Ben
Morris, Rt Hon A. (W'shawe)


Forrester, John
Morris, Rt Hon C. (O'shaw)

 
Foster, Derek
Morris, Rt Hon J. (Aberavon)


Foulkes, George
Morton, George


Fraser, J. (Lamb'th, N'w'd)
Moyle, Rt Hon Roland


Freud, Clement
Mulley, Rt Hon Frederick


Garrett, John (Norwich S)
Newens, Stanley


Garrett, W. E. (Wallsend)
Oakes, Rt Hon Gordon


George, Bruce
Ogden, Eric


Gilbert, Rt Hon Dr John
O'Halloran, Michael


Ginsburg, David
O'Neill, Martin


Golding, John
Palmer, Arthur


Graham, Ted
Parker, John


Grant, George (Morpeth)
Parry, Robert


Grant, John (Islington C)
Pavitt, Laurie


Hamilton, James (Bothwell)
Pendry, Tom 

Hamilton, W. W. (C'tral Fife)
Penhaligon, David


Hardy, Peter
Powell, Raymond (Ogmore)


Hart, Rt Hon Dame Judith
Prescott, John


Hattersley, Rt Hon Roy
Price, C. (Lewisham W)


Haynes, Frank
Race, Reg


Healey, Rt Hon Denis
Radice, Giles


Heffer, Eric S.
Rees, Rt Hon M (Leeds S)


Hogg, N. (E Dunb't'nshire)
Roberts, Albert (Normanton)


Holland, S. (L'b'th, Vauxh'll)
Roberts, Allan (Bootle)


Home Robertson, John
Roberts, Ernest (Hackney N)


Homewood, William
Roberts, Gwilym (Cannock)


Hooley, Frank
Robertson, George


Howells, Geraint
Robinson, G. (Coventry NW)


Huckfield, Les
Rooker, J. W.


Hudson Davies, Gwilym E.
Ross, Ernest (Dundee West)


Hughes, Robert (Aberdeen N)
Ross, Stephen (Isle of Wight)


Janner, Hon Greville
Rowlands, Ted


Jay, Rt Hon Douglas
Sever, John


John, Brynmor
Sheerman, Barry


Johnston, Russell (Inverness)
Sheldon, Rt Hon R.


Jones, Rt Hon Alec (Rh'dda)
Shore, Rt Hon Peter


Jones, Barry (East Flint)
Short, Mrs Renée


Jones, Dan (Burnley)
Silkin, Rt Hon J. (Deptford)


Kerr, Russell
Skinner, Dennis


Kilroy-Silk, Robert
Smith, Rt Hon J. (N Lanark)






Snape, Peter
Walker, Rt Hon H.(D'caster)


Soley, Clive
Weetch, Ken


Spearing, Nigel
Welsh, Michael


Spriggs, Leslie
White, Frank R.


Stallard, A. W.
White, J. (G'gow Pollok)


Steel, Rt Hon David
Williams, Rt Hon A.(S'sea W)


Stoddart, David
Wilson, Gordon (Dundee E)


Stott, Roger
Wilson, Rt Hon Sir H.(H'ton)


Strang, Gavin
Wilson, William (C'try SE)


Straw, Jack
Winnick, David


Summerskill, Hon Dr Shirley
Woolmer, Kenneth


Thomas, Dafydd (Merioneth)
Wrigglesworth, Ian


Thomas, Jeffrey (Abertillery)
Wright, Sheila


Thomas, Dr R.(Carmarthen)
Young, David (Bolton E)


Thorne, Stan (Preston South)



Tilley, John
Tellers for the Ayes:


Torney, Tom
Mr. Walter Harrison and 


Urwin, Rt Hon Tom
Mr. James Tinn


Varley, Rt Hon Eric G.





NOES


Adley, Robert
Cranborne, Viscount


Alexander, Richard
Critchley, Julian


Alison, Michael
Crouch, David


Anderson, Donald
Dean, Paul (North Somerset)


Aspinwall, Jack
Dickens, Geoffrey


Atkins, Robert (Preston N)
Dorrell, Stephen


Atkinson, David (B'm'th,E)
Dover, Denshore


Baker, Kenneth(St.M'bone)
du Cann, Rt Hon Edward


Baker, Nicholas (N Dorset)
Dunn, Robert (Dartford)


Banks, Robert
Durant, Tony


Beaumont-Dark, Anthony
Dykes, Hugh


Bendall, Vivian
Eden, Rt Hon Sir John


Bennett, Sir Frederic (T'bay)
Edwards, Rt Hon N. (P'broke)


Benyon, Thomas (A'don)
Eggar, Tim


Benyon, W. (Buckingham)
Elliott, Sir William


Berry, Hon Anthony
Eyre, Reginald


Best, Keith
Fairbairn, Nicholas


Bevan, David Gilroy
Fairgrieve, Russell


Biffen, Rt Hon John
Faith, Mrs Sheila


Biggs-Davison, John
Farr, John


Blackburn, John
Fell, Anthony


Body, Richard
Fenner, Mrs Peggy


Bonsor, Sir Nicholas
Fisher, Sir Nigel


Boscawen, Hon Robert
Fletcher, A. (Ed'nb'gh N)


Bottomley, Peter (W'wich W)
Fletcher-Cooke, Sir Charles


Bowden, Andrew
Fookes, Miss Janet


Boyson, Dr Rhodes
Forman, Nigel

 Braine, Sir Bernard
Fowler, Rt Hon Norman


Bright, Graham
Fox, Marcus


Brinton, Tim
Fraser, Peter (South Angus)


Brittan, Leon
Gardiner, George (Reigate)


Brooke, Hon Peter
Garel-Jones, Tristan


Brotherton, Michael
Glyn, Dr Alan


Brown, Michael(Brigg &amp; Sc'n)
Goodhart, Philip


Brown, Ronald W. (H'ckn'y S)
Goodhew, Victor


Browne, John (Winchester)
Goodlad, Alastair


Buchan, Norman
Gow, Ian


Buchanan-Smith, Alick
Gower, Sir Raymond


Buck, Antony
Grant, Anthony (Harrow C)


Budgen, Nick
Gray, Hamish


Bulmer, Esmond
Greenway, Harry


Burden, Sir Frederick
Griffiths, Peter Portsm'th N)


Butcher, John
Grist, Ian


Butler, Hon Adam
Grylls, Michael


Cadbury, Jocelyn
Gummer, John Selwyn


Carlisle, John (Luton West)
Hamilton, Hon A.


Carlisle, Kenneth (Lincoln)
Hamilton, Michael (Salisbury)


Carlisle, Rt Hon M. (R'c'n)
Hampson, Dr Keith


Chalker, Mrs. Lynda
Hannam, John


Chapman, Sydney
Haselhurst, Alan


Churchill, W. S.
Havers, Rt Hon Sir Michael


Clark, Hon A. (Plym'th, S'n)
Hawkins, Paul


Clark, Sir W. (Croydon S)
Hawksley, Warren


Clarke, Kenneth (Rushcliffe)
Hayhoe, Barney


Clegg, Sir Walter
Heddle, John


Cockeram, Eric
Henderson, Barry


Cope, John
Higgins, Rt Hon Terence L.


Cormack, Patrick
Hill, James


Corrie, John
Hogg, Hon Douglas (Gr'th'm)





Holland, Philip (Carlton)
Pawsey, James


Hooson, Tom
Percival, Sir Ian


Hordern, Peter
Peyton, Rt Hon John


Howell, Rt Hon D. (G'ldf'd)
Pink, R. Bonner


Hunt, David (Wirral)
Pollock, Alexander


Hurd, Hon Douglas
Porter, Barry


Irving, Charles (Cheltenham)
Price, Sir David (Eastleigh)


Jenkin, Rt Hon Patrick
Prior, Rt Hon James


Jessel, Toby
Proctor, K. Harvey


Jopling, Rt Hon Michael
Pym, Rt Hon Francis


Kaberry, Sir Donald
Raison, Timothy


Kershaw, Anthony
Rathbone, Tim


Kimball, Marcus
Rees, Peter (Dover and Deal)


King, Rt Hon Tom
Rees-Davies, W. R.


Knight, Mrs Jill
Renton, Tim


Knox, David
Rhodes James, Robert


Lamont, Norman
Rhys Williams, Sir Brandon


Lang, Ian
Ridsdale, Sir Julian


Langford-Holt, Sir John
Rifkind, Malcolm


Latham, Michael
Roberts, M. (Cardiff NW)


Lawrence, Ivan
Roberts, Wyn (Conway)


Lawson, Rt Hon Nigel
Rost, Peter


Lee, John
Sainsbury, Hon Timothy


Le Marchant, Spencer
St. John-Stevas, Rt Hon N.


Lester, Jim (Beeston)
Scott, Nicholas


Lewis, Kenneth (Rutland)
Shaw, Giles (Pudsey)


Lloyd, Ian (Havant &amp; W'loo)
Shaw, Michael (Scarborough)


Lloyd, Peter (Fareham)
Shelton, William (Streatham)


Loveridge, John
Shepherd, Colin (Hereford)


Luce, Richard
Shepherd, Richard


Lyell, Nicholas
Shersby, Michael


McCrindle, Robert
Silvester, Fred


Macfarlane, Neil
Sims, Roger


MacGregor, John
Skeet, T. H. H.


MacKay, John (Argyll)
Smith, Dudley


Macmillan, Rt Hon M.
Speed, Keith


McNair-Wilson, M. (N'bury)
Speller, Tony


McNair-Wilson, P. (New F'st)
Spence, John


McQuarrie, Albert
Spicer, Jim (West Dorset)


Madel, David
Spicer, Michael (S Worcs)


Major, John
Sproat, Iain


Marland, Paul
Squire, Robin


Marlow, Tony
Stainton, Keith


Marshall, Michael (Arundel)
Stanbrook, Ivor


Marten, Neil (Banbury)
Stanley, John


Maude, Rt Hon Sir Angus
Steen, Anthony


Mawby, Ray
Stevens, Martin


Mawhinney, Dr Brian
Stewart, Ian (Hitchin)


Maxwell-Hyslop, Robin
Stewart, A.(E Renfrewshire)


Mayhew, Patrick
Stokes, John


Mellor, David
Stradling Thomas, J.


Meyer, Sir Anthony
Tapsell, Peter


Miller, Hal (B'grove)
Taylor, Robert (Croydon NW)


Mills, lain (Meriden)
Taylor, Teddy (S'end E)


Mills, Peter (West Devon)
Temple-Morris, Peter


Mitchell, David (Basingstoke)
Thompson, Donald


Moate, Roger
Thorne, Neil (Ilford South)


Monro, Hector
Thornton, Malcolm


Montgomery, Fergus
Townend, John (Bridlington)


Moore, John
Trippier, David


Morgan, Geraint
van Straubenzee, W. R.


Morris, M. (N'hampton S)
Vaughan, Dr Gerard


Morrison, Hon C. (Devizes)
Viggers, Peter 

Morrison, Hon P. (Chester)
Waddington, David


Murphy, Christopher
Wakeham, John


Myles, David
Waldegrave, Hon William


Neale, Gerrard
Walker, Rt Hon P.(W'cester)


Needham, Richard
Walker, B. (Perth)


Nelson, Anthony
Waller, Gary


Neubert, Michael
Walters, Dennis


Newton, Tony
Ward, John


Nott, Rt Hon John
Warren, Kenneth


Onslow, Cranley
Watson, John


Oppenheim, Rt Hon Mrs S.
Wells, Bowen


Osborn, John
Wheeler, John


Page, Rt Hon Sir G. (Crosby)
Whitelaw, Rt Hon William


Page, Richard (SW Herts)
Whitney, Raymond


Parris, Matthew
Wickenden, Keith


Patten, Christopher (Bath)
Wiggin, Jerry


Patten, John (Oxford)
Wilkinson, John






Williams, D.(Montgomery)



Wolfson, Mark
Tellers for the Noes:


Young, Sir George (Acton)
Mr. Carol Mather and


Younger, Rt Hon George
Lord James Douglas-Hamilton.

Question accordingly negatived.

MATRIMONIAL HOMES (FAMILY PROTECTION) (SCOTLAND) BILL [LORDS]

Order for Second Reading read.

Ordered,
That the Bill be referred to the Scottish Grand Committee.—[Mr. Berry.]

Orders of the Day — Schools (Marriage Guidance)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]

Mr. Richard Page: The purpose of this debate about the need for marriage guidance in schools is to highlight what is for me, and, I am sure, for all other hon. Members, a matter of extreme concern, which is essentially the breaking down of the family unit in our society. As I regard the family unit as the foundation of our society, I am talking about the breaking down of society itself.
I should point out that I am not an expert on marriage or on marriage guidance. I raise the subject not only as someone who is concerned, but as someone who has a slight mathematical turn of mind and therefore an increasing concern at the appalling trend in the increasing divorce figures and the misery and heartache that they represent.
All hon. Members have experienced more than once in their surgeries the problems that are thrown up by divorce. On hearing the background that emerges from one or other of the distraught parties, they often think that the marriage was doomed from its first day. I hope that the views that I shall put forward in this debate will be supported, because it is time that we took positive action to tackle the problem at source rather than attempting to pick up the pieces at the divorce court door.
I shall outline briefly the statistics of the present problem, so that we can appreciate its sheer size and distinguish the main ingredients that make up the horrific total. At this point, I express my appreciation to Mr. Lock of the statistics section of the House of Commons Library, who has helped me to compile the data.
We are all aware of the appalling and increasing number of cases in the divorce courts. They are steadily increasing year by year. They seem to set at odds the theory that premarital cohabitation, which is now more common, would eliminate any incompatibilities in couples before their unions are legalised and thus reduce divorce. It appears that that is not so. The statistics show that, of every four couples who leave the church door or the registry office, one couple will appear later in the divorce court. Concealed within those frightening figures is an even worse figure, showing that if a bride is in her teens on her wedding day there is a one-in-three chance of the marriage breaking down. As about 25 per cent. of all ladies marry when they are in their teens, it is not surprising that the current divorce rate is approaching 200,000 a year.
Let us consider the parallels in one or two other countries. We have the highest divorce rate in the EEC. As a rough guide, it is approximately twice that of our fellow EEC countries. However, in the United States, out of every 1,000 marriages today, about 40 per cent. will have failed within 15 years. That figure does not include the black population, which tends to make liaisons outside the formality of marriage.
Although those figures are profoundly depressing, they do not seem to have reduced the attraction of marriage as an institution. The amount spent annually on celebrating and commemorating weddings is estimated at a staggering £1½ billion. However, there is a down side to that statistic of joy and nuptial planning, because it has been estimated that the cost to the taxpayer of marital breakdown, including such items as supplementary benefit and children in care, is approximately £1 billion per year.
As I mentioned earlier, there is a need to approach this problem at source. In addition, when our teenage children are about to leave school, they should be educated in some of the responsibilities and obligations that are attendant upon marriage.
It is because of these horrific statistics and the trend which seems remorselessly to be climbing higher and higher that we should introduce marriage guidance into all our schools. The logical question should be asked, why could this not be undertaken by a teacher as part of the sociological studies which take place in the last year of compulsory education? The answer should be that the pupil-teacher relationship is not the right one for advising on the responsibility of marriage. A pupil-teacher relationship is essentially one of a person in authority imparting information to one in the role of supplicant. That might be ideal for passing on knowledge of maths, English or even sex education, but it should certainly not be used to impart knowledge of the delicate relationships which exist within marriage.
For that reason, I should like to see external advisers, experienced in marriage counselling, brought in to talk to each class in its last year on the responsibilities which exist within marriage. They should try to dispel some of the illusions that have been created, mainly by the media, which portray conjugal bliss, sex and violence in equal proportions.
This debate was sparked off by a long report from one of my constituents, Mrs. Williamson, who has undertaken marriage guidance in one of my local schools. In it she details some of the more unreal reasons given to her by school leavers for getting married and which were obvious foundations for an early appearance in the divorce court. Some were fairly common, such as the need to escape from an unhappy home. But, as evidence portrays, children from unhappy homes tend to make unhappy parents and in turn produce even more unhappy children.
Some girls wanted marriage for no other reason than that it would stop them being pestered by other boys. Others were motivated by the media in the belief that it would be a life of romance, love and escapism for ever more, with little concept of the responsibilities that go with marriage.
Some schools have already introduced this type of teaching, although, I am afraid, very few. I know that the Marriage Guidance Council in London works in about 40 London schools, supported by an ILEA grant of £4,500—less than the cost of one child in care.
It is sad that today it appears impossible to solve any problem without throwing money at it. I should like to think that, given a clear direction from the Department of Education and Science, schools and people with marriage guidance experience and qualifications could come together to provide, at minimal cost, a service to try to halt this remorseless rise in divorce.
Naturally, I have raised this matter in my own constituency. The county education department in Hertfordshire has been most encouraging in its reaction. However, if the idea is to spread nationally and if all schools are to provide this essential advice the direction must come from the Department of Education and Science. I should like a clear instruction to go from the Department, through the county education departments, to each school that every class of school leaver should receive advice and information on marriage.
I believe that today we are seeing the smashing of the family unit. The divorce rate and the resultant emotional debris form one example of what happens when people are encouraged to abrogate their responsibilities to the State. I believe that at present marriage is too lightly regarded. It is thought of almost as a hire purchase contract which can be terminated by an emotional, if not financial, final payment in the divorce court. Some advice from an external source for those about to leave school might make them stop and consider before taking that plunge into marriage. That additional consideration could reduce the ever-increasing number of teenage divorces.

The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): I am grateful to my hon. Friend the Member for Hertfordshire, South-West (Mr. Page) for raising the important question of the need for marriage guidance inside society, especially in schools. I agree with his sentiments.
The decision about the school curriculum lies with local education authorities, school governing bodies and head teachers. The Department can act only in an advisory role. The way in which education has been built up with teachers on one side and local authorities on the other, with governors inside schools, together with the Department, means that there has not been a centralisation of educational power. In many ways that is good, and in other ways it is bad. It depends on who is in charge. I am sure that my hon. Friend believes that if the Conservatives were in charge all the time matters would be perfect. You, Mr. Deputy Speaker, might not agree with that. As the power will not for ever more be in our hands, its dispersal will prevent abuse.
The Department has been concerned about marriage guidance and health education. We produced a paper about health education. The chapter on sex education in the handbook "Health Education in Schools" lays emphasis on the importance of teaching in the context of responsible personal. relationships and with due regard to the wishes of the parents.
As my hon. Friend is aware, the tentative suggestions that we made in a school curriculum document produced a great outcry from certain people who thought that we were interfering with what they were doing locally. That shows how carefully we must proceed. The document states:

Health education, like preparation for parenthood, is part of the preparation of the individual for personal, social and family responsibilities. Health education should give pupils a basic knowledge of health matters both as they affect themselves and as they affect others, so that they are helped to make informed choices in their daily lives. It should also help them to become aware of those moral issues and value judgments which are inseparable from such choices. Preparation for parenthood and family life should help pupils to recognise the importance of those human relationships which sustain, and are sustained by, family life and the demands and duties that fall on parents.
I am sure that my hon. Friend agrees with that.
The curriculum paper also states that sex education is one of the most sensitive parts of the broad programmes of health education and that the fullest consultation and co-operation with parents is necessary before it is embarked upon. Because we recognise the parents' sensitivity, we have introduced regulations under section 8 of the Education Act 1980, which were laid before the House on 1 May. The debate is topical. It shows how wise is my hon. Friend not only about family life but about the calendar. We have required local education authorities to inform parents of the manner and context in which sex education is provided in their schools. Later I want to tie that together with the question of the parents and the structure of the family. If parents want more information or have any doubts about what their child will learn, they should approach the head teacher.
I want to say something about the withdrawal of children from sex education lessons. During the passage last year of the Education (No. 2) Act, with which I had some small connection, the Government made it clear that we did not think it right to give parents a statutory right to withdraw their children from sex education lessons. Sex education in schools is often treated in a broad context, including health education, moral education, social education and the parental responsibilities to which my hon. Friend referred. We think that it is best treated in that broad way. It would give rise to severe difficulties if the right of withdrawal were to be granted.
However, the absence of such parental right should not prevent a head from allowing a child to be withdrawn by his parents if the head is satisfied that this can be done and that it would be the best solution in the circumstances. The Department is funding a three-year research programme at Aston university to discover how education that is designed to prepare children for later life and parenthood may best be provided within the school curriculum.
I concur with my hon. Friend's contention that a stable society and a society with responsibility rests on two anchors. These are Professor Hayek's two approaches. First, there is the stability of the family. That is a unit in which children can grow and feel secure. If there is one thing that we need for children these days with the varied values of our time, it is the security of a home. The ultimate deprivation is not what money goes or does not go into a home but the lack of a secure home. Such a home can provide guidance, firmness at times and security.
Secondly, there are property rights, which in many instances are an extension of the family. Security comes with property rights and house ownership. These rights give the child who is growing up the opportunity to do something that all children must do if they are to grow up into full adulthood—namely, have the ability to grow roots so that they are not blown off course by every change in fashion. They must have property rights and security.
About one-third or one-quarter of marriages end in divorce. In many instances the serious feature is not the


divorce of the parents but the effect upon the children, especially on young children, on knowing the separation of their parents. However good other people may be as step-parents, there is nothing like the security of natural parents.
Similarly, we have 30,000 abortions a year among girls under the age of 20 years. We have examples of child neglect. As an ex-schoolmaster, I can say that the problems inside schools of one-parent families require compensation from the rest of society. Those problems stem from a lack of security.
In the bringing up of children there is no replacement for the security of the family. The more we stress that, as has been done by my hon. Friend, the better our society will be and the more secure in future.
When I was in my previous headships in a previous incarnation and whenever someone wanted to put something else in the school curriculum, I always asked "What are you going to remove?" The risk is that we shall leave schools to deal with all the problems of society and then chastise the schools because they are not doing what we want them to do in English, mathematics and other subjects. That happens on occasion because they have to do so much social work on the side because of the failures of society outside.
The length of the school day is exactly what it was in 1939. However, the length of the school year is shorter now than in 1939. The length of school holidays now—I must not say this too loudly in case teachers are listening and think that it is a loaded statement—is greater, save for those of grammar schools before the war. They are longer now in comprehensive and primary schools than in 1939.
We must remember that schools have to provide basic literacy and numeracy in the body of knowledge with which they equip the pupil. I am not decrying anything that my hon. Friend has said, but that should be placed on record out of respect to the teaching profession.
Who should be involved in preparation for parenthood, of which sex education is a part? It was revealed in a survey that 80 per cent. of parents considered that it was their job and not that of the schools. It was even more interesting that only 30 per cent. of parents were involving themselves in the job.
There is a risk in the Welfare State. My hon. Friend rightly referred to the need of marriage guidance. The more responsibility we lay on schools for that education the more we are encouraging parents to opt out firmly from those responsibilities.
My hon. Friends the Members for Hertfordshire, South-West, for Hertford and Stevenage (Mr. Wells) and for Southgate (Mr. Berry) and I are idealists. We are probably the greatest idealists in the House of Commons. There are not many idealists on the Opposition Benches at the moment. We should like families to become so secure that that responsibility is taken within the values of the family.
One of the betrayals of our generation has been not just the question of the heavy divorce rate and the one-parent family but the retreat of parents from doing what is their responsibility. In many cases, they are brainwashed by the permissive people of our age and the "baby knows best" generation—I shall not mention the author of that philosophy—where people fear to correct, to lay down, to direct and to point out what values are.
At the same time as we rightly emphasise the preparation for parenthood and for marriage, we must similarly put back into society and the family the

responsibility that rests there. Parenthood is not an accident but is intended. It is a natural cause for which the father and mother have great responsibility. They should be responsible for bringing up their children in their home with the right values and the right security. Whatever we do in marriage guidance and in sex education in schools, that is but a secondary prop to what we must eventually do to return the responsibility to the family.
I was interested to hear of the work being done in Hertfordshire. Mrs. Williamson was referred to as doing that good work. There is much in what my hon. Friend said about someone coming in from outside, as someone comes to talk about careers. It is important that that person should be well trained, as is Mrs. Williamson. Children are not naturally inclined towards discipline, and they must be approached in the right way. I still do not agree in many ways with my old employer, the Inner London Education Authority, but I am glad to commend the fact that although it is not spending much money it has said that it is considering marriage guidance education, which is an important factor.
That guidance should be linked with the question of money and how it is handled in the family, the buying of houses, tax responsibilities and all the other matters which come into adult life. It would be dangerous if there were a division between the physical and responsibility sides of marriage. There has been a tendency towards that in recent years. I hope that it is now in retreat. With the speech of my hon. Friend, it will be in massive retreat as what he has said spreads around the country. That was indicated to the world outside earlier tonight. People are probably sitting up discussing not only what we are saying here—wishing that they were listening and that they were the favoured ones in the Gallery—but what was previously said about that topic.
I fear that in schools, once one talks about the preparation for life, it becomes a pure preparation for sexual mechanics, like a branch of the Olympics. My hon. Friend did not refer to that. I trust that that is a sign of the times. In marriage, the physical side is part of a totality. If one teaches sex education in schools as a sort of mechanical operation without bringing it within the pattern of the family, its responsibilities, the children born in it and the risks being taken, it is like mixing paints in art without anyone doing a painting. My hon. Friend is concerned about the painting of a responsible marriage, which is the aim.
Recently, sex education has tended to concentrate on the mechanical operation and not the fullness of the marriage relationship. Human relations are more than physical. We have a mental and spiritual responsibility to others, and we cannot isolate the separate aspects of a relationship. There is a risk if sex education is taken out of the total relationship. It should not be separated from moral responsibilities, especially at the age of discovery. When we teach by the discovery method, we cannot grumble if it is put into practice. It was all very well when pupils sat in rows and did what they were told, but we now teach by discovery, as in mathematics. Pupils may discover Euripides, although there is not much Euripides nowadays. Greek is declining. However, to return to the subject, with the discovery method being widely used, we are playing with fire if we have sex education without emphasising the parental bond.
Soon after I left Highbury Grove, there was a problem—I hope not physical, as I would never advocate


violence—between the headmaster and teachers giving sex education irresponsibly. I was amazed at the headlines. The headmaster was a distinguished individual, whom I was delighted to appoint my deputy three weeks before I resigned to come to the House. He removed the teachers because their teaching methods were cruel and too physical.
My hon. Friend asks that society should be responsible. Children should be taught that marriage is not an experiment. It is not like hire purchase, where a contract is taken out and the purchase may be removed but one can start again and refurnish the room. It is a permanent relationship, intended for the procreation of children, so that they can grow up in a secure home. My hon. Friend referred to the divorce rate and the tragedy of one-parent families. No matter what help is given, those families are under a disadvantage.
My hon. Friend wants advice to be given to local authorities so that marriage guidance is undertaken by responsible counsellors. We cannot issue a decree, but attention will be paid to the debate. Many things happen as a result of debates here. My hon. Friend speaking from his experience, tells us that there is a need for marriage guidance in schools. I agree. Children need not only career guidance and help in understanding wages and taxes. They also need to understand that much of their lives will be spent in partnership, with the full fruition of a family. We shall advise authorities that proper marriage guidance is essential in schools—having regard to the pressures on the curriculum—to prepare children for the outside world. I hope that in 30 years we shall look back to this time when my hon. Friend started the movement for responsible marriage guidance in schools, which helped to make our children and our nation more secure.

Question put and agreed to.

Adjourned accordingly at fourteen minutes past Twelve o' clock.